Kohler Trust for Preservation

PART X, LINE 2:

“The trust has received a determination letter from the internal revenue service dated july 23, 1990, ruling that the trust qualifies as a tax exempt organization under section 501(c)(3) of the u.s. Internal revenue code and corresponding provisions of state law and accordingly is not subject to federal or state income tax. The tax effects from an uncertain tax position can be recognized in the financial statements, only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The trust recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized, upon ultimate settlement with the relevant tax authority. With few exceptions, the trust is no longer subject to u.s. Federal or state income tax examinations by tax authorities for the fiscal years ending before 2018 (2017 for the state of wisconsin). On march 22, 2018, communication was received from the internal revenue services (irs), notifying the trust that it had been selected for audit related to the january 31, 2016 filing year. The audit was completed during 2020 and the audit determined that the trust is a private foundation described under section 509(a) of the internal revenue code effective february 1, 2015. The trust has exhausted all available remedies for the matter with the irs and has petitioned the united states tax court regarding the trust's continuing classification as a supporting organization under section 509(a)(3). The trust continues to defend its position regarding the matter and the outcome of the petition involving the trust cannot be predicted with certainty.”