Plumbing Industry Apprenticeship

PART X, LINE 2:

“No provision has been made for income taxes as the corporation is exempt under internal revenue code section 501(c)(5) and comparable laws of the state of california. The corporation is not classified as a private foundation. Management evaluated the corporation's tax positions and concluded that the corporation had maintained its tax exempt status and had taken no uncertain tax positions that required adjustment to the financial statements. Therefore, no provision or liability for income taxes has been included in the financial statements. The corporation's policy for evaluating uncertain tax positions is a two step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more-likely-than-not that the position will be sustained upon audit, including resolution of related appeals or litigations processes, if any. The second step is to measure the tax benefit or liability as the largest amount that is more than 50% likely to be realized or incurred upon settlement. Based on an analysis prepared by the corporation, it was determined that the tax positions taken or expected to be taken had no material effect on the recorded tax assets and liabilities of the corporation. The corporation applies this guidance to all tax positions for which the statute of limitations remain open (fiscal years ended since december 31, 2010) and determined there were no material unrecognized tax benefits. There have been no related tax penalties or interest, which would be classified as tax expense in the statement of activities. As the corporation is exempt from taxation under section 501(c)(5) of the internal revenue code and comparable laws of the california revenue and taxation code it generally is not subject to federal or state income taxes, the adoption of this guidance did not have a material effect on the corporation's financial statements.”