Mentor Inc DBA Project Riral

Pt X, Line 2

“The organization is a rhode island nonprofit corporation exempt from federal income taxes as a public charity under section 501(c)(3) of the internal revenue code and applicable state law. Management believes that the organization operates in a manner consistent with their tax-exempt status at both the state and federal levels. The organization annually files irs form-990, return of organization exempt from income tax, reporting various information that the irs uses to monitor the activities of tax-exempt entities. The form 990 is subject to examination by the internal revenue service up to three years from the extended due date of the tax return. The accounting standard on accounting for uncertainty in income taxes addresses the determination of whether tax benefits claimed or unexpected can be claimed on a tax return should be recorded in the financial statements. Under this guidance, the organization may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by taxing authorities, based on the technical merits of the position. Examples of tax positions included tax-exempt status of the organization and various positions related to potential sources of unrelated business taxable income (ubit). When tax returns are filed, it is highly certain that some positions would be sustained upon examination by the tax authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be sustained. The benefits of a tax position is recognized in the financial statements in the period which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset against or aggregated with other positions. If the tax position is not more than likely to be sustained the full amount of the tax benefit must be included as an unrecognized tax liability in the accompanying statement of financial position along with any associated interest and penalties that would be payable to the taxing authority upon examination.”