Little Peoples School

Part X : FIN48 Footnote

“The School, Foundation, and LPS are exempt from income tax under Internal Revenue Code Section 501(c)(3) and California Franchise Tax Regulation Section 23701 (d), and contributions to them are tax deductible within the limitations prescribed by the Code. All organizations have been classified as publicly supported organizations, which are not private foundations under Section 509(a) of the Code. The organizations are subject to income taxes on any net income that is derived from a trade or business, regularly carried on and not in the furtherance of the purposes for which it was granted exemption. No income tax provision has been recorded as the net income, if any, from any unrelated trade or business, in the opinion of management, is not material to the accompanying combined financial statements taken as a whole.The organization recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a more likely than not threshold, the amount recognized in the financial statements is the benefit expected to be realized on settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of August 31, 2016 and 2015, the organization had no uncertain tax positions. The organization recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense. Income tax returns prior to 2011 are no longer subject to examination by tax authorities. The organization is relying on its exempt status and its adherence to all applicable laws and regulations to preserve that status.”