Contents

• [109.1] 8.1 Overview

• [109.1] 8.2 Use of Summons to Obtain Information Concerning the Finances of a Political Organization
  • [109.1] 8.2.1 Criminal Investigation
  • [109.1] 8.2.2 EP/EO:EO

• [109.1] 8.3 Summons for Information Pursuant to Tax Treaties

• [109.1] 8.4 Restrictions on Church Tax Inquiries and Examinations
  • [109.1] 8.4.1 Situations in which IRC 7611 Procedures Do Not Apply
    • [109.1] 8.4.1.1 Collection/EP/EO:EO Requirements Prior to Service of Church Summons
  • [109.1] 8.4.2 Church Tax Inquiry
  • [109.1] 8.4.3 Church Tax Examination
  • [109.1] 8.4.4 IRC 7611 Definitions
  • [109.1] 8.4.5 Issuing Church Summonses
    • [109.1] 8.4.5.1 Criminal Investigation

• [109.1] 8.5 Records Outside the United States

• [109.1] 8.6 Information From Federal Officials and Employees

• Exhibit [109.1] 8-1 Church Tax Inquiry Letter

• Exhibit [109.1] 8-2 Administrative and Constitutional Provisions

• Exhibit [109.1] 8-3 Church Tax Examination Letter

[109.1] 8.1  (04-30-1999)
Overview

1. This chapter contains the following sections regarding the use of summons to obtain information:
   • Concerning the Finances of a Political Organization
   • Pursuant to Tax Treaties
   • Regarding Church Tax Inquiries and Examinations
   • For Records Located Outside the United States
   • From Federal Officials and Employees

[109.1] 8.2  (04-30-1999)
Use of Summons to Obtain Information Concerning the Finances of a Political Organization

1. The term political organization, includes a political party, a national, state, or local committee of a political party, and campaign committees or other organizations that accept contributions or make expenditures for influencing the selection, nomination, or election of any individual for elective public office. The term political organization does not include an organization, to which the taxpayer is the only contributor.
2. Information concerning the finances of a political organization includes testimony or documents that disclose the identity of contributors or recipients of expenditures.
3. A summons may be used to obtain testimony or documents concerning the finances of a political organization if compliance would not require a general disclosure of the finances. Such a summons will be restricted to information relating to the tax liability of named taxpayers under examination or investigation. The summons must specifically identify the taxpayer's transactions with the political organization and be limited to require only testimony or documents relating to those transactions or to other similar transactions. If the taxpayer's transactions with the political organization are known to have occurred through the use of an intermediary person or organization, the summons may require testimony or documents relating to specifically identified transactions of the intermediary with the political organization.
4. Except as provided in 8.2.1 below, do not use a summons to obtain testimony or documents requiring a general disclosure of the finances of a political organization. This restriction applies even though the testimony is to be obtained from, or the documents are owned or possessed by, a source that is not a political organization if the information sought by a summons would generally disclose the finances of a political organization.

[109.1] 8.2.1  (04-30-1999)
Criminal Investigation

1. If conformity with 8.2 (3) or an exception to the provisions of 8.2 (4) is desired, a memorandum request with a copy of the proposed summons will be submitted by the Chief, CI, with the concurrence of the District Director, to the Assistant Commissioner, CI, for prior written approval. If time is of the essence, a telephonic request can be made to the Assistant Commissioner, CI, followed immediately by a memorandum.
2. If there is a question as to the legal sufficiency of the proposed summons, and time permits, refer the summons to the appropriate District Counsel office for a preliminary legal review, prior to referral of the request to Headquarters for approval.

[109.1] 8.2.2  (04-30-1999)
EP/EO:EO

1. A summons may be issued to obtain testimony or documents concerning a political organization (whether from the organization itself or a recordkeeper, such as a bank), if needed, to determine the exempt status or tax liability of an organization under examination.
2. The EP/EO Key District Director must authorize the summons before it is issued. The signature must be on the original and all copies of the summons.
   1. Prepare a detailed memo to the Key District Director, explaining the need for the summons.
   2. Retain a copy of such memo in the examination administrative file.
   3. Refer any questions about the legal sufficiency of the proposed summons to District Counsel for a preliminary legal review before forwarding it to the Key District Director for approval.
3. In situations requiring expeditious handling, the Key District Director may give oral authorization to the Chief, EP/EO, to issue a summons to a political organization. A statement signed by the Chief, EP/EO, on the original and all copies of the summons, must specify that he or she had prior authorization by the Key District Director, and include the date authorized. Such authorization should be confirmed by the Key District Director in writing as soon as possible after the summons is issued.

[109.1] 8.3  (04-30-1999)
Summons for Information Pursuant to Tax Treaties

1. A summons may be issued to obtain information from individuals and entities within the United States, relating to the foreign tax liability of a foreign citizen, in response to a formal request made through the Assistant Commissioner (International) by the foreign competent authority under income tax treaties, estate and gift tax treaties, or tax information exchange agreements.
2. If the Assistant Commissioner (International) determines that a request from a foreign competent authority is proper under a treaty or tax information exchange agreement, a memorandum request that the information be obtained will be sent to the appropriate District Director. The District Director may select Collection, Examination or CI, to respond to the request. An attempt should initially be made to obtain the information without a summons. If the witness refuses to voluntarily supply the information, a summons will be prepared by the Assistant Commissioner (International) and transmitted to the District Director for service. If the summons is not honored or a petition to quash the summons is filed, request District Counsel to initiate enforcement action.

[109.1] 8.4  (04-30-1999)
Restrictions on Church Tax Inquiries and Examinations

1. IRC 7611 (Tax Reform Act of 1984) superseded IRC 7605 and imposed restrictions on inquiries or examinations concerning a church. Before the Service can civilly use any information for an adverse action against a church (e.g., final notice of revocation or denial of exempt status, issuance of a notice of deficiency, or the assessment of any underpayment of tax), the restrictions of IRC 7611 must first be met.

[109.1] 8.4.1  (04-30-1999)
Situations in which IRC 7611 Procedures Do Not Apply

1. IRC 7611(i), however, states that these restrictions do not apply to:
   1. any criminal investigation;
   2. any inquiry or examination relating to the tax liability of any person other than a church;
   3. any assessment under section 6851 (relating to termination assessments of income tax), IRC 6852 (relating to termination assessments in case of flagrant political expenditures of IRC 501(c)(3) organizations), or section 6861 (relating to jeopardy assessment of income taxes, etc.);
   4. any willful attempt to defeat or evade any tax imposed by this title; or
   5. any knowing failure to file a return of tax imposed by the title.
2. The restrictions of IRC 7611 do not apply to examinations relating to the tax liability of any person other than a church. For example, examinations regarding:
   1. the tax status or liability of a contributor to the church;
   2. use of church funds to a particular individual or organization that might result in the denial of a charitable contribution, (for example, a tuition payment that is claimed as a contribution)
   3. assignment of income, services, or contributions to a church;
   4. a vow of poverty with transfer of assets to a church;
   5. social security tax, self-employment tax, or income tax withheld from wages of individuals other than the church.
3. The restrictions of IRC 7611 do not apply to third-party records. For example:
   1. Records relating to the church held by a third-party (to be acquired by a summons to which IRC 7609 applies) such as cancelled checks in the possession of a bank. The summons precedures of IRC 7609 must be followed before third-party records are examined.
   2. Requests made to a church for information needed to locate third-party records. Such information includes the church's chartered name, the state and year in which it was incorporated, and the location of bank accounts.

   NOTE:

   Consult with District Counsel whenever questionable situations are encountered.

4. The restrictions of IRC 7611 do not apply to routine requests. Routine requests are requests for information the Service needs to administer the Code apart from requests for information needed to determine an organization's exempt status or to assess tax. Routine requests include requests for information concerning:
   1. the filing or failure to file any tax or information return by the church;
   2. compliance with income tax or FICA withholding responsibilities;
   3. supplemental information needed to complete the mechanical processing of any incomplete or incorrect return filed;
   4. information needed to process letter ruling requests or applications for exemption or foundation classification;
   5. information necessary to process and periodically update registrations for tax-free transactions (excise tax), elections for exemptions from windfall profits tax, or employment tax exemption requests by a church;
   6. information identifying a church that will be used by the Service to update its Cumulative List of Tax Exempt Organizations (Pub. 78) and other computer files; and
   7. confirmation that a specific business is or is not owned or operated by a church.

   NOTE:

   Repeated (two or more) failures by the church to respond to routine requests may support the commencement of a church tax inquiry. In any case, if a summons is required to secure this information after the failure of the church to respond, the provisions of IRC 7611 must be observed.

5. The restrictions of IRC 7611 must be observed if an organization claims to be a church. When you have reason to believe an organization's claim to be a church is frivolous, secure District Counsel's opinion before a determination is made that IRC 7611 is not applicable.
6. IRC 7611 applies to schools operated as part of a church or convention or association of churches. However, IRC 7611 does not apply to a separately organized or incorporated church-supported school, or other organization incorporated separately from the church.

[109.1] 8.4.1.1  (04-30-1999)
Collection/EP/EO:EO Requirements Prior to Service of Church Summons

1. Follow the provisions of IRC 7611 prior to the service of a summons on a church when the purpose of the summons is to:
   1. determine a church's requirement to file a tax return;
   2. secure information required to prepare a delinquent tax return.

   NOTE:

   A summons served on a third party to obtain information necessary to determine whether a church is subject to filing requirements is not subject to IRC 7611.

[109.1] 8.4.2  (04-30-1999)
Church Tax Inquiry

1. Before a church tax inquiry can begin, certain reasonable belief and notice requirements defined in IRC 7611 must be satisfied. There must be a reasonable belief on the part of the Regional Commissioner that the church:
   1. may not be tax exempt (by reason of its status as a church) under IRC 501(a); or
   2. may be carrying on an unrelated trade or business (within the meaning of IRC 513), or otherwise engaged in activities subject to taxation under the Internal Revenue Code.
2. Prepare a memorandum and submit it through channels to the Regional Commissioner. Include the following in the memorandum:
   1. reasons for believing the church has a requirement to file a federal tax return;
   2. actions taken to secure the required information voluntarily from the church; and
   3. actions taken to secure the required information from Service records and other third parties.
3. Upon approval by the Regional Commissioner, prepare a letter for the church to notify them that a church tax inquiry is being initiated (see Exhibits 109.1.8-1 and 109.1.8-2). Send the letter by certified mail, return receipt requested. The Regional Commissioner must sign this letter. Explain the following in the letter:
   1. the concerns leading to the inquiry;
   2. the general subject matter of the inquiry;
   3. the relevant Code provisions;
   4. applicable administrative and constitutional provisions, including the right to a conference before an examination of church records;
   5. request information to alleviate concerns which give rise to the inquiry.
4. The church, in response to the inquiry notice, may provide sufficient information to permit a final determination. Conclude the inquiry and notify the church in writing. The letter will be signed by the District Director. The letter must specify:
   1. class of tax;
   2. specific periods reviewed;
   3. determination of the church's liability for each period reviewed.
5. If the final determination will result in the assessment of additional tax (other than by voluntary filing), refer the proposed assessment to Regional Counsel for approval. Regional Counsel must furnish written approval that the Service has substantially complied with the provisions of IRC 7611. Attach this memorandum to the return prepared under IRC 6020(b) submitted for assessment.
6. If a church fails to respond to the inquiry notice, follow the procedures before serving a summons on a church.
7. Conclude church inquiry procedures within 90 days of issuance of the church inquiry notice.

[109.1] 8.4.3  (04-30-1999)
Church Tax Examination

1. Conduct a church tax examination of the church records only to the extent necessary to determine:
   1. the liability for any tax;
   2. the amount of tax;
   3. whether an organization claiming to be a church is a church for any period.
2. A church tax examination can only begin if certain notice of examination and opportunity for conference requirements, set forth in IRC 7611, are first satisfied.
3. The church may not respond to the inquiry notice or may not voluntarily furnish the required information. After 15 days, prepare a church tax examination notice for the Regional Commissioner's signature (see Exhibit 109.1.8-3).
4. Issue a notice of examination after the notice of inquiry is issued, and at least 15 days before beginning the examination. The notice must also be given to Regional Counsel. Send after the notice of inquiry is issued, and the notice by certified mail, return receipt, and include the following:
   1. a copy of the church tax inquiry notice previously sent to the taxpayer;
   2. a description of all church records and activities to be examined;
   3. copies of all documents collected or prepared by the Service for use in determining the church's filing requirements required to be disclosed under the Freedom of Information Act, as supplemented by IRC 6103;
   4. information to participate in a conference with a Service official to discuss and attempt to resolve concerns.

   NOTE:

   The church may request a meeting anytime prior to the examination. If the church requests a conference, schedule it within a reasonable period of time. Only one conference is needed to comply with IRC 7611. Churches may not use the conference requirement to delay an examination beyond the time necessary to prepare for and hold a conference.

5. Regional Counsel has 15 days from the issuance of the examination notice to file an advisory objection.
6. Notify the church in writing if, as a result of an advisory objection, a determination is made to conclude the church examination with no further action.
7. In response to the examination notice, the church may provide sufficient information to permit a final determination. Conclude the inquiry and notify the church in writing. This letter, signed by the District Director, will specify the:
   1. class of tax;
   2. specific periods reviewed; and
   3. determination concerning the church's liability for each period reviewed.
8. If the final determination will result in the assessment of additional tax (other than by voluntary filing), refer the proposed assessment to Regional Counsel for approval. Regional Counsel must furnish written approval that the memorandum to the return prepared under IRC 6020(b) was submitted for assessment.
9. Complete church examination procedures within 2 years after the date the notice of examination is mailed to the church. The running of this 2-year period is suspended for any period during which:
   1. a pending judicial proceeding brought by the church against the Service with respect to the church tax inquiry or examination;
   2. a pending judicial proceeding brought by the Service against the church to compel compliance;
   3. the Service is unable to take actions with respect to the examination because of an order issued in a suit under IRC 7609;
   4. the church fails to comply with any reasonable request for church records, or other information (for periods in excess of 20 days, but not more than 6 months).
10. If the Service has not substantially complied with the church examination procedures, a summons enforcement proceeding brought by the Service to gain access to church records may be stayed by the Court until the Service complies with IRC 7611 procedures.

[109.1] 8.4.4  (04-30-1999)
IRC 7611 Definitions

1. Effective Date: January 1, 1985.
2. A church tax inquiry is any inquiry to a church (other than an examination) to determine whether a church is:
   1. tax exempt under IRC 501(a); or
   2. carrying on an unrelated trade or business (within the meaning of IRC 513); or
   3. engaged in activities which may be subject to taxation.

   NOTE:

   A church tax inquiry may lead to a church tax examination.

3. A church tax examination is any examination of church records, or the religious activities of any church to determine if a church is:
   1. tax exempt under IRC 501(a); or
   2. carrying on an unrelated trade or business (within the meaning of IRC 513); or
   3. engaged in activities which may be subject to taxation.

   NOTE:

   A church tax examination may not take place until a church tax inquiry has been completed.

4. The term "church" includes:
   1. any organization claiming to be a church;
   2. any convention or association of churches.
5. Church records include:
   1. all regularly kept church corporate and financial records;
   2. corporate minute books, contributor and membership lists, and church books of account;
   3. private correspondence, in the possession of the church, between a church and its members.

[109.1] 8.4.5  (04-30-1999)
Issuing Church Summonses

1. Comply with the requirements of IRC 7611 before issuing a summons to a church to secure:
   1. information about a church's federal filing requirement;
   2. delinquent returns.
2. If the purpose of the summons is to secure information to aid in the collection of liabilities already assessed, IRC 7611 is not applicable and a summons may be served.
3. Modify the preprinted description of purpose on the summons form to reflect the specific purpose of the summons.
4. Prepare a church summons in accordance with procedures in Preparation of Summons. District Counsel must review the proposed summons before service relating to a church's requirement to file a federal tax return or to secure required delinquent returns. District Counsel will furnish a copy of the approved summons to Regional Counsel.
5. If a church does not comply with a summons, refer to District Counsel.

[109.1] 8.4.5.1  (04-30-1999)
Criminal Investigation

1. In church-related investigations, CI will follow the same procedures for summonses and other inquiries as in other criminal cases, since IRC 7611(i) states restrictions on church tax inquiries and examinations do not apply to any criminal investigation.

[109.1] 8.5  (04-30-1999)
Records Outside the United States

1. Before issuing a summons for records located outside the United States, forward a copy of the proposed summons by the Chief to the appropriate District Counsel office with a statement of the circumstances and efforts to secure the records and why the taxpayer or witness will not comply. The Chief will consider Counsel's advice and decide if the summons will be used.
2. A summons for records located in a country with which the United States has a tax treaty or tax information exchange agreement must be coordinated with the Assistant Commissioner (International) or the Associate Chief Counsel (International), Branch 1, as explained in section 8.3.
3. See Chapter 6 Section 6.7 for information concerning foreign banks.

[109.1] 8.6  (04-30-1999)
Information From Federal Officials and Employees

1. No summons will be issued to federal officials or employees for information in connection with their official responsibilities. Such information may ordinarily be obtained through liaison with the agency. Requests for assistance in situations not covered by existing guidelines should be referred, through channels, to the Assistant Commissioner of the appropriate division.

Use IRS letterhead and send by certified mail. The following is an example of the information which should be included in the letter.

• Church Tax Inquiry Letter
• Person to Contact
• Contact Telephone Number

Dear Sir or Madam: The Internal Revenue Service is responsible for administering the Internal Revenue laws of the United States, including those that apply to organizations exempt from federal income tax. To carry out that responsibility, section 7602 of the Internal Revenue Code authorizes the Service to determine the correctness of any return, make a return when none has been filed, or to determine the tax liability of any person or organization. However, section 7611 imposes restrictions on the Service in conducting tax inquiries and examinations of churches and conventions or associations of churches. In passing section 7611, Congress intended to ensure that the Internal Revenue Service carry out its obligation to resolve questions concerning the (tax liability, if any, ) or (tax-exempt status) of churches and organizations claiming to be churches, with due regard for both the rights of church organizations and the responsibility of the Service to enforce the Internal Revenue laws.Because I reasonably believe that you may (not be tax-exempt as a church under section 501(a)) (or that you may), (be liable for federal income or other tax), this letter is notice of the beginning of a church tax inquiry under section 7611(a). I am sending this letter because I believe it is necessary to resolve questions about your (liability for unrelated business income tax), (liability for employment taxes), (tax-exempt status as a church under section 501(a)). Our concerns are caused by (insert explanation). A list of specific questions about your operation is attached. Please answer each question completely. If your response resolves our concerns about your (tax liability) (exempt status), it will not be necessary to pursue this matter further. Attached, as required by section 7611(a)(3)(B)(ii), is a statement of your administrative and constitutional rights during a tax inquiry and examination.Your rights include the right to a conference with Service representatives to discuss our concerns before the Service begins an examination. You will be formally offered the opportunity for a conference in the notice of examination, if a notice of examination is sent to you. Please reply within 15 days of the date of this letter to the (insert district office official and address). If we do not hear from you within that time, we may issue a Notice of Church Examination letter, as explained in the attached statement of rights. If you have any questions, please contact the person whose name and telephone number are shown above. Thank you for your cooperation.Sincerely yours,Regional CommissionerEnclosure[s]

The First Amendment of the Constitution provides that "Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof. . ." The first clause is referred to as the Establishment Clause; the second is the Free Exercise Clause. The Establishment Clause prohibits government sponsorship of religion. Central to this prohibition are the concepts of government neutrality and the separation between church and state. The Supreme Court has held that the Free Exercise Clause of the First Amendment is an absolute prohibition against the regulation of religious beliefs. The First Amendment provides substantial protection for lawful conduct grounded on religious beliefs.However, the government may limit religiously-motivated conduct when the limitation is essential to accomplishing an overriding governmental interest. Section 7611 of the Internal Revenue Code provides the following protections to organizations claiming to be churches or conventions or associations of churches:

1. The IRS may begin a church tax inquiry only if an IRS Regional Commissioner reasonably believes, on the basis of facts and circumstances recorded in writing, that an organization claiming to be a church or convention or association of churches may not qualify for exemption, may be carrying on an unrelated trade or business (within the meaning of section 513 of the Code), or may otherwise be engaged in taxable activities.
2. If a tax inquiry is begun, the IRS is required to provide written notice at the beginning of the inquiry. The Notice of Church Tax Inquiry must contain an explanation of the concerns that gave rise to the inquiry and the general subject matter of the inquiry. It must also contain an explanation of the provisions of the Code that authorize the inquiry and a general explanation of applicable administrative and constitutional provisions with respect to the inquiry.
3. If the IRS wishes to examine a church's records or religious activities, the Regional Commissioner must personally approve the examination and must provide an additional written notice (Notice of Church Examination) to the church at least 15 days prior to the examination. At the same time notice is given to the church, the Regional Commissioner must notify the appropriate IRS Regional Counsel of the proposed examination. The Regional Counsel is then allowed 15 days to file a non-binding advisory opinion about the examination. The church's Notice of Church Examination is required to include the following: a copy of the Notice of Church Tax Inquiry previously provided; a description of the church records and activities which the IRS wishes to examine; a copy of all documents collected or prepared by the IRS for use in the examination that are required to be disclosed under the Freedom of Information Act (5 U.S.C. 552) as supplemented by section 6103 of the Code; and an offer of a conference with the IRS to discuss the concerns which gave rise to the inquiry and the general subject matter of the inquiry prior to the examination. The Notice of Church Examination sent to the church may be mailed no less than 15 days after the Notice of Church Tax Inquiry. The Notice of Church Examination, however, must generally be mailed within 90 days after the Notice of Church Tax Inquiry or the IRS is required to end the inquiry without change to the church's tax status.
4. Failure of the IRS to substantially comply with the above requirements may result in a stay of summons enforcement proceedings to gain access to church records until the requirements are satisfied.
5. The IRS is generally required to complete any church inquiry or examination not later than 2 years after the date on which the Notice of Church Examination was mailed to the church. The 2-year period may be extended by mutual agreement between the church and the IRS. It is also suspended during certain judicial proceedings and during any period in excess of 20 days but not in excess of 6 months, during which a church or its agents fail to comply with any reasonable IRS request for church records or other information. However, in the case of a church tax inquiry in which there is no Notice of Church Examination, the IRS is generally required to complete the inquiry within 90 days after the date on which the Notice of Church Tax Inquiry was mailed to the church.
6. The IRS is limited initially to an examination of church records relevant to the church's tax-exempt status for the 3 most recently completed tax years preceding the date of the Notice of Church Examination. If the church is not exempt for any of these 3 years, the IRS may examine relevant records for the 6 completed tax years immediately preceding the Notice of Church Examination. Church records of a year earlier than the third or sixth completed taxable years may be examined if material to a determination of tax-exempt status during the 3 or 6-year period. For examinations related to unrelated business taxable income, when no return is filed, the IRS may assess tax for the 6 most recently completed taxable years preceding the date of the Notice of Church Examination. Church records of a year earlier than the sixth year may be examined if material to a determination of unrelated business income tax liability during the 6-year period. For examinations involving issues other than determination of exempt status or unrelated business income tax liability, there is no limit on the taxable periods that may be examined if no return has been filed. If a tax return has been filed by a church, the normal rules for determining tax liability or assessing tax apply. In addition, if there has been a willful attempt to defeat or evade tax, a knowing failure to file a return, or if there is a criminal investigation, the provisions of section 7611, including any special limitation periods, do not apply.
7. The IRS Regional Counsel must approve, in writing, an adverse determination concerning the tax-exempt status of an organization claiming to be a church, an adverse determination concerning the right of an organization claiming to be a church to receive tax deductible contributions, or the issuance of a notice of tax deficiency to a church following a church tax examination.
8. Organizations claiming to be churches are entitled to bring a declaratory judgment action under section 7428 once the IRS issues a revenue agent's final report proposing to revoke or deny the church's tax exempt status.
9. If an inquiry or examination is begun within 5 years of the date of the Notice of Church Examination (or if no Notice of Church Examination is sent, a Notice of Church Tax Inquiry), it must be approved by the IRS Assistant Commissioner for Employee Plans and Exempt Organizations. This approval is not required if the second examination does not involve the same or similar issues as the preceding inquiry or examination or if the first inquiry or examination resulted in a change to the organization's exempt status, an assessment of unrelated business income tax or other tax, or a recommendation for a substantive change in the church's operations, including accounting practices.

Use IRS letterhead and send by certified mail. The following is an example of the information which should be included in the letter.Department of the TreasuryInternal Revenue ServiceNotice of Church Examination LetterPerson to ContactContact Telephone NumberDear Sir or Madam: On (enter date or dates), we sent you a Notice of Church Tax Inquiry within the meaning of section 7611(a) of the Internal Revenue Code to notify you of concerns we have about your (tax liability), (exempt status). A copy of that letter and a copy of the information that caused our concern are attached as required by section 7611(b)(3) of the Code.The following paragraph should be used if the organization responded to the church tax inquiry.

• Thank you for your letter of (enter date), in response to the Notice of Church Tax Inquiry. However, we still think an examination of (describe records or activities to be examined) may be necessary to resolve our concerns. Accordingly, as provided by law, we are sending this Notice of Church Examination. Before we begin an examination or take action based on information in our possession, you have the right to a conference with Service officials to try to resolve our concerns and alleviate the need for further action. A conference may help define the issues and limit the scope of any examination. You must request a conference before the beginning of an examination, which will not begin sooner than 15 days from the date of this letter.

The following paragraph should be used if the organization has not responded to the church tax inquiry notice and any follow-up.

• We have no record of receiving a reply to the Notice of Church Tax Inquiry. Accordingly, as provided by law, we are sending this Notice of Church Examination. If you do not provide information to answer our questions within 15 days of the date of this letter and you do not request the conference you are afforded by section 7611(b)(2)(B) of the Code, we may undertake an examination of (describe records and activities to be examined). You have the right to a conference to attempt to resolve our concerns before we begin an examination. You must request the conference before the beginning of the examination, which may not begin until 15 days after the date of this letter.

The following paragraphs may be appropriate in certain exceptional cases if the Service possesses information to issue an adverse determination without formal examination.

• We initiated a church tax inquiry and, as provided by law, we are sending this Notice of Church Examination to obtain information that we think is material to a determination of your tax status. If you fail to provide this information in a satisfactory and timely manner, the Service may in lieu of examination make a determination in your case based on the information we now possess or may acquire from other sources. This determination could result in a proposal to (revoke) (deny) your exemption from federal income tax. Before we begin an examination or take action based on information in our possession, you have the right to a conference with Service officials to try to resolve our concerns and alleviate the need for further action.
• If we determine you are not exempt, the Service will notify the appropriate state officials, in accordance with section 6104(c) of the Code, that you are not an organization described in section 501(c)(3). The Service will also consider your organization to be a taxable entity.

The following paragraphs should be used in all cases.

• We have enclosed a copy of all documents collected or prepared by the Service for use in the examination and disclosure of which is required by the Freedom of Information Act (5 U.S.C. 552), as supplemented by section 6103 of the Code relating to disclosure and confidentiality of tax return information.
• If you would like a conference, please contact the person whose name and telephone number are listed above to arrange a mutually convenient time. If we do not hear from you within 15 days from the date of this letter, you will be contacted to arrange a time for the examination or you will be notified of the action the Service will take based on information in our possession. Thank you for your cooperation.

Sincerely yours,Regional CommissionerEnclosures Copy of Church Tax Inquiry Notice and Enclosures Other Documents Required by IRC 7611(b)(3)Letter 1904(P)