Centers for Independence Inc.

ORGANIZATION'S LIABILITY FOR UNCERTAIN TAX POSITIONS UNDER ASC 740-10

“Schedule d, part x, line 2 cfi and its related corporations qualify as tax-exempt organizations under sections 501(c)(3) of the internal revenue code. Cfi and its related corporations are not known to have unrelated business taxable income; accordingly, no provision for income taxes has been recorded in the consolidated financial statements. The center 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% likelihood of being realized upon ultimate settlement with the relevant tax authority. Management has concluded that there are no material uncertain tax positions that require recognition in the consolidated financial statements. Cfi and its related corporations file tax information returns in the united states federal jurisdiction. Tax years open to examination by tax authorities under the federal statute of limitations for the center are calendar years 2012 through 2015 and under the state statute of limitations are calendar years 2011 through 2015. Certain inactive related corporations have not yet filed returns for earlier years, meaning the statute of limitations has not started and remains open for these years. Cfed, as a section 501(c)(2) title-holding corporation, has reported its activity on the form 990 filing of its single parent entity (mcfi/cfi). While this consolidated reporting is allowed, management also opted to separately file a form 990-n for cfed for the same periods, to ensure the continued recognition of exemption for the consolidated entity. During 2014, cfed formally merged into its single parent entity, mcfi. All active corporations have made proper filings with the internal revenue service (irs) and the wisconsin department of financial institutions within the last three years and four years, respectively, ended december 31, 2015. The center recognizes, if necessary, interest and penalties related to unrecognized tax benefits in the provision for income taxes. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended december 31 2015 and 2014.”