Gentlemen:

This is in reply to your brief wherein exception is taken to our ruling of March 5, 1965, which held for the reasons set forth therein, that you are not exempt from Federal income tax as an organization described in section 501(c)(3) of the Internal Revenue Code of 1954.

On the basis of the additional information submitted and the representations made with respect to your proposed operations, it is held that you are exampt from Federal income tax as a religious and educational organization described in section 501(c)(3) of the 1954 Code, on and after April 8, 1965, the date on which articles of amendment to your articles of incorporation were filed with the Office of Recorder of Deeds of the District of Columbia and changes were made in your manner and method of operation. Accordingly, our ruling of March 5, 1965, is modified to the extent that it is inconsistent with this ruling. Any questions concerning excise, employment or other Federal taxes should be submitted to your District Director.

You will not be required to file Federal income tax returns for the period beginning April 8, 1965 and ending December 31, 1965, and for the year 1966 and subsequent years so long as you retain an exempt status, unless you are subject to the tax on unrelated business income imposed by section 511 of the Code and are required to file Form 990-T for the purpose of reporting unrelated business taxable income. Any changes in operation from those described, or in your character or purposes, must be reported immediately to your District Director for consideration of their effect upon your exempt status. You must also report any change in your name and address.
 

Inner Peace Movement

You are required, however, to file annually an information return, Form 990-A, with your District Director, so long as this exemption remains in effect. This form may be obtained from the District Director and is required to be filed on or before the fifteenth day of the fifth month following the close of your annual accounting period, which ends December 31.

Contributions made to you on and after April 8, 1965, are deductible by donors as provided in section 170 of the Code. Bequests, legacies, devises, transfers or gifts to or for your use on or after April 8, 1965, are deductible for Federal estate and gift tax purposes under the provisions of sections 2055, 2106 and 2522 of the Code.

You are not liable for the taxes imposed under the Federal Insurance Contributions Act (social security taxes) unless you file a waiver of exemption certificate as provided in such act. You are not liable for the taxes Imposed under the Federal Unemployment Tax Act. Inquiries about the waiver of exemption certificate for social security taxes should be addressed to your District Director.

The District Director of Internal Revenue, Baltimore, Maryland, is being advised of this action.