Organization Fails to Qualify for Tax-Exempt Status

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Person to contact: 
Name: * * *
ID number: * * *
Telephone: * * *
Fax: * * *

UIL: 501.25-00

Date: January 1, 2022

Employer ID number: * * *

LEGEND:

B = Date
C = State
D = Self-Proclaimed Country 

Dear * * *:

We considered your application for recognition of exemption from federal income tax under Internal Revenue Code (IRC) Section 501(a). We determined that you don't qualify for exemption under IRC Section 501(c)(25). This letter explains the reasons for our conclusion. Please keep it for your records.

Issues

Do you qualify for exemption under IRC Section 501(c)(25)? No, for the reasons stated below.

Facts

You were formed as a corporation, an unincorporated association and as a trust all in the state of C. Your date of incorporation is B. The purpose clause of your Articles of Incorporation states: “This state government is invested with the powers and authority to create and enforce laws and impose taxes including protection of lives and property by maintenance of a police force.”

You have adopted a constitution and have formed a “sovereign nation state of D.”

You intend to operate the following agencies:

• Bureau of Motor Vehicles

• Secretary of State

• Department of Justice

• Marshall Services

• Electric Power Distribution

• Libraries and Archives

• Credit Card Issues

• Research and Development in the Social Sciences and Humanities

• Elementary and Secondary Schools

• Business and Secretarial Schools

• Courts

• Police Protection

• Legal Counsel and Prosecution

• Correctional Institutions

• Fire Protection

Your main source of financial support will come from your “taxpayers” who are citizens of D.

Law

Internal Revenue Code (IRC) Section 501(c)(25) of the Code provides for exemption from federal income tax for organizations that moot the following substantive requirements:

IRC Section 501(c)(25)(A) provides exemption to any corporation or trust which

 Section 501(c)(25)(C) provides an organization is described in this subparagraph if such organization is —

Section 501(c)(25)(D) provides a corporation or trust shall in no event be treated as described in subparagraph (A) unless such corporation or trust permits its shareholders or beneficiaries —

Notice 87-18, 1987-1 C.B. 455, states an IRC Section 501(c)(25) applicant's articles of incorporation or trust instrument must include the above requirements.

Application of law

To be exempt as an organization described in IRC Section 501(c)(25) of the Code, you must be both organized and operated for the purposes of acquiring real property and holding title to, and collecting income from such property, and remitting the entire amount of income from such property (less expenses) to 1 or more organizations described in subparagraph (C) which are shareholders of such corporation or beneficiaries of such trust. Your organizing documents are silent with regards to the requirements of an IRC 501(c)(25) applicant. (See Notice 87-18). You are neither organized nor operated to hold title to real property. You state you were created to operate as a sovereign nation state, which is not a Section 501(c)(25) purpose.

Conclusion

You do not qualify for exemption as an organization described in Section 501(c)(25). You are not organized or operated for the purpose of holding title to real property. As stated above, you were created to operate as a sovereign nation state.

If you agree

If you agree with our proposed adverse determination, you don't need to do anything. If we don't hear from you within 30 days, we'll issue a final adverse determination letter. That letter will provide information on your income tax filing requirements.

If you don't agree

You have a right to protest if you don't agree with our proposed adverse determination. To do so, send us a protest within 30 days of the date of this letter. You must include:

• Your name, address, employer identification number (EIN), and a daytime phone number

• A statement of the facts, law, and arguments supporting your position

• A statement indicating whether you are requesting an Appeals Office conference

• The signature of an officer, director, trustee, or other official who is authorized to sign for the organization or your authorized representative

• The following declaration:

  For an officer, director, trustee, or other official who is authorized to sign for the organization: Under penalties of perjury, I declare that I have examined this request, or this modification to the request, including accompanying documents, and to the best of my knowledge and belief, the request or the modification contains all relevant facts relating to the request, and such facts are true, correct, and complete.

Your representative (attorney, certified public accountant, or other individual enrolled to practice before the IRS) must file a Form 2848, Power of Attorney and Declaration of Representative, with us if they haven't already done so. You can find more information about representation in Publication 947, Practice Before the IRS and Power of Attorney.

We'll review your protest statement and decide if you gave us a basis to reconsider our determination. If so, we'll continue to process your case considering the information you provided. If you haven't given us a basis for reconsideration, we'll send your case to the Appeals Office and notify you. You can find more information in Publication 892, How to Appeal an IRS Determination on Tax-Exempt Status.

If you don't file a protest within 30 days, you can't seek a declaratory judgment in court later because the law requires that you use the IRC administrative process first (IRC Section 7428(b)(2)).

Where to send your protest

Send your protest, Form 2848, if applicable, and any supporting documents to the applicable address:

You can also fax your protest and supporting documents to the fax number listed at the top of this letter. If you fax your statement, please contact the person listed at the top of this letter to confirm that they received it.

You can get the forms and publications mentioned in this letter by visiting our website at www.irs.gov/forms-pubs or by calling 800-TAX-FORM (800-829-3676). If you have questions, you can contact the person listed at the top of this letter.

Contacting the Taxpayer Advocate Service

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that can help protect your taxpayer rights. TAS can offer you help if your tax problem is causing a hardship, or if you've tried but haven't been able to resolve your problem with the IRS. If you qualify for TAS assistance, which is always free, TAS will do everything possible to help you. Visit www.taxpayeradvocate.irs.gov or call 877-777-4778.

Sincerely,

Stephen A. Martin
Director, Exempt Organizations
Rulings and Agreements