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IRS PLR: Membership Organization Providing Commercial Land Tours Exempt Status Denied for Failing Organizational, Operational Test (IRC §501)

May 29, 2020, 5:00 AM

Exempt tax code Section 501(c)(3) status of a membership organization maintaining and operating commercial land tours on an owner’s land denied for failing to organize and operate exclusively for tax-exempt purposes in violation of Treasury Regulations Section 1.501(c)(3)-1(b) and Treas. Reg. Section 1.501(c)(3)-1(c)(1). The IRS stated that the organization does not meet the organizational test outlined in Treas. Reg. Section 1.501(c)(3)-1(b)(1)(i) because its organizing documents do not limit its purposes, dedicate its assets to one or more exempt purpose, and is silent regarding how assets will be distributed upon dissolution. Specifically, the IRS noted that...

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