501(c)(3) stuff

[AliFarr@aol.com]

KAT wrote:

>This does indeed come from our District Director (not the
IRS Tax Auditor), so it is an "official" letter.  And it refers to the
section of the tax code that he seems to think we are in violation of
"the requirements of Reg. 1.501(c)(3)-1(b)."

>Unfortunately, in the copy of the Internal Revenue Code that I have
(copyright 1998), THERE IS NO 501(c)(3)-1(b)!  This just confuses me
further.

Kat, there is a difference between CODE and REGS.  You are looking at the
CODE, he is quoting the Reg which is the IRS' interpretation of the Code.

It is also of interest to note that the letter says, "Failure to make the
REQUESTED amendment MAY endanger your exemption..." (emphasis mine).  So,
indeed, the IRS is not "requiring" these changes at all.

>Additonally, it is interesting to me to note that the changes outlined in
Proposal 1 were not (unless there was another letter from the IRS besides
the one that was sent to me with the ballot) even suggested by the IRS
(they don't appear anywhere on the page).  Where exactly did this
PARTICLULAR language come from???

I would guess they were in the January 5, 1998 letter where the AERC was first
asked to amend.

>It may also be prudent to consider that corporations might want to do what
the IRS asks them to do (even if it is not legally required).

Explaining to the IRS that you do not HAVE to do what they want is generally
like trying to explain something to a brick wall.  You are speaking to someone
about as intelligent with about the same inclination to change.  Its easier to
poll the entire membership than argue with the IRS and probably
cheaper.................

Alison Farrin