Compliance and Legal Status

501(c)(3) Recognition

Justice Access Foundation has obtained recognition from the Internal Revenue Service as an organization exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. This recognition is granted through a formal determination letter issued by the IRS following review of the organization’s Form 1023 application and governing documents.

Section 501(c)(3) status means:

• JAF is exempt from federal income tax on income derived from its charitable activities
• Contributions to JAF are deductible to donors as charitable contributions, subject to applicable limitations
• JAF is subject to regulatory requirements concerning private benefit, private inurement, political activity, and lobbying

Public Charity vs. Private Foundation

JAF is classified as a public charity, not a private foundation. This distinction is legally significant:

JAF’s public charity classification is maintained through ongoing compliance with the IRS public support test.

Public Support Test

JAF’s public charity status under Section 509(a)(1) requires compliance with the public support test under Section 170(b)(1)(A)(vi). This test requires that:

• At least one-third (33.3%) of JAF’s total support over a rolling five-year measurement period is received from governmental units, publicly supported organizations, and individual donors
• No single donor or related group of donors constitutes more than 2% of total support in the public support numerator (excess amounts are excluded from the numerator but retained in the denominator)
• Large donations from single sources are included in total support but limited in the qualifying public support calculation

JAF monitors its public support ratio on an ongoing basis and reports the calculation in its annual Form 990. The Board has adopted a policy target of maintaining public support at or above one-third of total support, with no single source contributing more than 70% of the public support figure.

IRS Form 1023

JAF filed IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3), to obtain its tax-exempt status determination. The Form 1023 application includes:

• JAF’s Articles of Incorporation and Bylaws
• A narrative description of charitable activities
• Financial projections for the initial organizational period
• Governance documentation, including the Conflict of Interest Policy
• A statement of the charitable class and organizational mission

The IRS determination letter confirming JAF’s 501(c)(3) status is available for public inspection upon request at JAF’s principal office.

Form 990 Transparency

As a public charity, JAF files IRS Form 990 annually, disclosing:

• Total revenues by source category
• Total expenditures by program services, management and general, and fundraising
• Officer and director compensation (JAF: none)
• Key organizational transactions and related party disclosures
• Public support ratio and five-year calculation
• Governance policies in effect

JAF’s Form 990 filings are available for public inspection at JAF’s principal office and through the IRS public disclosure portal. Filings are also submitted to the California Attorney General as required by California law.

Asset Dissolution Clause

JAF’s Articles of Incorporation contain a dissolution clause that complies with California nonprofit corporation law and IRS requirements for 501(c)(3) organizations. Under this clause:

• Upon dissolution, after payment of all lawful debts and liabilities, all remaining assets must be distributed to one or more organizations that are:
  • Recognized as 501(c)(3) public charities by the IRS, or
  • Operated exclusively for charitable, educational, or other public purposes under Section 501(c)(3)
• No assets may revert to founders, directors, officers, employees, or private individuals
• Distribution requires notice to and, where required, approval by the California Attorney General and the Superior Court

No Private Inurement

Section 501(c)(3) prohibits the use of a charitable organization’s net earnings to benefit any private shareholder or individual. JAF strictly complies with this prohibition:

• No director, officer, or employee receives compensation from JAF
• No financial benefit, discount, or other consideration is provided to any director, officer, or related party beyond documented reimbursement of legitimate organizational expenses authorized by the board
• All transactions involving any related party require full board disclosure and approval
• The annual Form 990 contains a certification by the responsible officer that no private inurement has occurred during the reporting period