Family genealogy group denied section 501(c)(3) status

Plain-English summary

An organization sought recognition as a tax-exempt educational organization under section 501(c)(3). It researched and shared the genealogy of one individual and that person's descendants, communicated mainly with extended family members, and also held family reunions. The IRS found that the articles of incorporation lacked valid exempt-purpose and dissolution clauses, so the organization failed the organizational test. It also found no evidence of substantial public educational programs, materials, or dissemination and concluded that the activities primarily benefited one family rather than the public. The IRS distinguished organizations that teach genealogy to the public, make research broadly available, or conduct genealogy for religious purposes. Because the organization did not protest the proposed adverse determination within 30 days, the IRS made the denial final, and contributions generally would not be deductible under section 170.

Ruling snapshot

• Question: Does a family-focused genealogy organization satisfy the organizational and operational tests for exemption under IRC § 501(c)(3)?
• Outcome: Denied
• Key authorities: IRC §§ 501(a), 501(c)(3), 170, and 7428(b)(2); Treas. Reg. §§ 1.501(c)(3)-1(a)(1), (b)(1)(i), (b)(4), (c)(1), (d)(1)(ii), and (d)(3)(i)

Full text (IRS public release)

Department of the Treasury Date:
Internal Revenue Service 09/13/2023
Tax Exempt and Government Entities Employer ID number:
PO Box 2508
Cincinnati, OH 45201
Tax years:

All
Person to contact:
Release Number: 202349014
Release Date: 12/8/2023
UIL Code: 501.33-00,
501.35-00

Dear :

This letter is our final determination that you don't qualify for exemption from federal income tax under Internal
Revenue Code (IRC) Section 501(a) as an organization described in IRC Section 501(c)(3). Recently, we sent
you a proposed adverse determination in response to your application. The proposed adverse determination
explained the facts, law, and basis for our conclusion, and it gave you 30 days to file a protest. Because we
didn't receive a protest within the required 30 days, the proposed determination is now final.

Because you don't qualify as a tax-exempt organization under IRC Section 501(c)(3), donors generally can't
deduct contributions to you under IRC Section 170.

We may notify the appropriate state officials of our determination, as required by IRC Section 6104(c), by
sending them a copy of this final letter along with the proposed determination letter.

You must file the federal income tax forms for the tax years shown above within 30 days from the date of this
letter unless you request an extension of time to file. For further instructions, forms, and information, visit
www.irs.gov.

We'll make this final adverse determination letter and the proposed adverse determination letter available for
public inspection after deleting certain identifying information, as required by IRC Section 6110. Read the
enclosed Letter 437, Notice of Intention to Disclose - Rulings, and review the two attached letters that show our
proposed deletions. If you disagree with our proposed deletions, follow the instructions in the Letter 437 on how
to notify us. If you agree with our deletions, you don't need to take any further action.

If you have questions about this letter, you can call the contact person shown above. If you have questions
about your federal income tax status and responsibilities, call our customer service number at 800-829-1040
(TTY 800-829-4933 for deaf or hard of hearing) or customer service for businesses at 800-829-4933.

Letter 4038 (Rev. 11-2021)
Catalog Number 47632S

Sincerely,

Stephen A. Martin
Director, Exempt Organizations
Rulings and Agreements

Enclosures:
Letter 437
Redacted Letter 4034
Redacted Letter 4038

Letter 4038 (Rev. 11-2021)
Catalog Number 47632S

Department of the Treasury
Internal Revenue Service
PO Box 2508
Cincinnati, OH 45201
Date:

July 17, 2023
Employer ID number:

Person to contact:
Name:
ID number:
Telephone:
Fax:

Legend: UIL:

B= state 501.33-00
C= date 501.35-00
D= individual

Dear :

We considered your application for recognition of exemption from federal income tax under Internal Revenue
Code (IRC) Section 501(a). We determined that you don't qualify for exemption under IRC Section 501(c)(3).
This letter explains the reasons for our conclusion. Please keep it for your records.

Issues

Do you qualify for exemption under IRC Section 501(c)(3)? No, for the reasons stated below.

Facts

You submitted Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3)
of the Internal Revenue Code.

You attest that you were incorporated in B on C. You attest that you have the necessary organizing document,
that your organizing document limits your purposes to one or more exempt purposes within the meaning of IRC
Section 501(c)(3), that your organizing document does not expressly empower you to engage in activities, other
than an insubstantial part, that are not in furtherance of one or more exempt purposes, and that your organizing
document contains the dissolution provision required under Section 501(c)(3).

You attest that you are organized and operated exclusively to further educational purposes. You attest that you
have not conducted and will not conduct prohibited activities under IRC Section 501(c)(3). Specifically, you
attest you will:

• Refrain from supporting or opposing candidates in political campaigns in any way

Letter 4034 (Rev. 01-2021)
Catalog Number 47628K

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• Ensure that your net earnings do not inure in whole or in part to the benefit of private shareholders or
  individuals

• Not further non-exempt purposes (such as purposes that benefit private interests) more than
  insubstantially

• Not be organized or operated for the primary purpose of conducting a trade or business that is not related
  to your exempt purpose(s)

• Not devote more than an insubstantial part of your activities attempting to influence legislation or, if you
  made a Section 501(h) election, not normally make expenditures in excess of expenditure limitations
  outlined in Section 501(h)

• Not provide commercial-type insurance as a substantial part of your activities

During review of your Form 1023-EZ, detailed information was requested supplemental to the above
attestations.

You provided Articles of Incorporation that showed your purpose is to preserve D's family history. There is no
evidence of the official document limiting your purposes to one or more exempt purposes within the meaning of
IRC Section 501(c)(3), or that your organizing document contains the dissolution provision required under
Section 501(c)(3). Prior to the incorporation date, you operated as a small unincorporated association with
primary communication to members through email, and you do not have website.

You indicated that extended family members and related individuals participate in your activities. Almost all of
your time is spent researching, sharing, promoting, and educating on the topic of genealogical research of D
settling in a specific area of C in the early . However, you provided no evidence of any educational
programs, sessions or how your activities are useful or beneficial to the public. Your remaining time was spent
on family reunions, with the caveat that it could become much larger in the year the reunion is held. There were
no other activities mentioned. Your justification for research on D and his descendants was people find it
interesting.

You stated research could be made available to the public by various means including email, database
information sharing, and via website or social media.

You have no revenue or expenses and expect no revenue or expenses.

Law

IRC Section 501(c)(3) provides for the recognition of exemption of organizations that are organized and
operated exclusively for religious, charitable, or other purposes as specified in the statute. No part of the net
earnings may inure to the benefit of any private shareholder or individual.

Treas. Reg. Section 1.501(c)(3)-1(a)(1) states that, in order to be exempt as an organization described in IRC
Section 501(c)(3), an organization must be both organized and operated exclusively for one or more of the
purposes specified in such section. If an organization fails to meet either the organizational test or the
operational test, it is not exempt.

Treas. Reg. Section 1.501(c)(3)-1(b)(1)(i) provides that an organization is organized exclusively for one or
more exempt purposes only if its articles of organization:

Letter 4034 (Rev. 01-2021)
Catalog Number 47628K

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(a) Limit the purposes of such organization to one or more exempt purposes; and
(b) Do not expressly empower the organization engage, otherwise than as an insubstantial part of its
activities, in activities that in themselves are not in furtherance of one or more exempt purposes.

Treas. Reg. Section 1.501(c)(3)-1(b)(4) holds that an organization is not organized exclusively for one or more
exempt purposes unless its assets are dedicated to an exempt purpose. An organization's assets will be
considered dedicated to an exempt purpose, for example, if, upon dissolution, such assets would, by reason of a
provision in the organization's articles or operation of law, be distributed for one or more exempt purposes.

Treas. Reg. Section 1.501(c)(3)-1(c)(1) provides that an organization will be regarded as operated exclusively
for one or more exempt purposes only if it engages primarily in activities which accomplish one or more of
such exempt purposes specified in IRC Section 501(c)(3). An organization will not be so regarded if more than
an insubstantial part of its activities is not in furtherance of an exempt purpose.

Treas. Reg. Section 1.501(c)(3)-1(d)(1)(ii) provides that an organization must establish that it is not organized
or operated for the benefit of private interests such as designated individuals, the creator or his family,
shareholders of the organization, or persons controlled, directly or indirectly, by such private interests.

Treas. Reg. Section 1.501(c)(3)-1(d)(3)(i) defines the term educational as the instruction or training of the
individual for the purpose of improving or developing his capabilities or the instruction of the public on subjects
useful to the individual and beneficial to the community.

Revenue Ruling 71-580, 1971-2 C.B., 235 held that a non-profit organization which researches a particular
family in order to compile genealogical research on that family for the purposes of performing religious
ordinances of the religious denomination to which the family members belong may qualify under IRC Section
501(c)(3).

Revenue Ruling 80-301, 1980-2 C.B.,182 held an organization researching genealogy which provides
instruction in genealogical research techniques, conducts genealogical research projects which are made
publicly available, and provide materials for libraries, museums, and community displays may qualify for
exemption under IRC Section 501(c)(3).

Revenue Ruling 80-302, 1980-2 C.B., 180 held that an organization formed to conduct genealogical activities
primarily for members of a particular family, who focus on their own genealogy, with little public orientation,
doesn't qualify for exemption under 501(c)(3), noting that "any benefit to the general public is merely
incidental to the private benefit accruing to family member." It is distinguished from 80-301 because of the lack
of emphasis on public education.

Callaway Fam. Assoc. Inc. v. Commr. of Internal Revenue. 71 T.C. 340 (Tax 1978). the organization was a
family association formed to study immigration to and migration within the United States by focusing upon its
own family history and genealogy. Its activities included researching the genealogy of its members for the
ultimate purpose of publishing a family history. The organization's activities served the private interests of it's
members and was not operated exclusively for exempt purposes.

Price Genealogical Association v. United States, 44 A.F.T.R. 2d 9-5024 (D.D.C. 1979), states that an
organization established for the benefit of its members, where relatives almost exclusively compromise

Letter 4034 (Rev. 01-2021)
Catalog Number 47628K

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membership, aided in family reunions was found to have little public orientation, and public dissemination of
information was not a goal of the organization. Plaintiff relied on Revenue Ruling 71-580 as justification. The
court found that 71-580 was segregated because the members were required by their faith to perform the
research, while the stated purpose of the organization was educational.

Application of law

A ruling on exempt status is based solely on facts and representations in the administrative file. You have not
provided supporting documentation to establish you meet the requirements of IRC Section 501(c)(3). Section
501(c)(3) sets forth two main tests for qualification for exempt status. As stated in Treas. Reg. 1.501(c)(3)-
1(a)(1), an organization must be both organized and operated exclusively for purposes described in Section
501(c)(3).

Your Articles of Incorporation did not have valid purpose and dissolution clauses. You did not provide any
proof that you have amended these deficiencies. As a result, you have not satisfied the organizational test
described in Treas. Reg. Sections 1.501(c)(3)-1(b)(1)(i) and 1.501(c)(3)-1(b)(4).

You do not meet the operational test under IRC Section 501(c)(3) because you are not operating exclusively for
educational purposes as required under Treas. Reg. Section 1.501(c)(3)-1(c)(1). Although you state that you
have educational purposes, you have not provided any written evidence of substantial educational activities and
other statements in the administrative record contradict the public orientation of your educational efforts. You
stated that members were family members and related individuals of the research subject, and that there were no
activities other than research/sharing/promoting/education and the family reunion. That is, your primary
education efforts are focused on private individuals, not the general public. This is supported by your statement
that information "could be" disseminated to the public through various means. There is no evidence from your
past operations that you provide any education to the general public. You did not provide any historical
relevance/notoriety to the particular individual/family. You did not provide any educational materials which
would support an educational purpose. Further, Treas. Reg. Section 1.501(c)(3)-1(d)(1)(ii) provides that an
organization must establish that it is not organized or operated for the benefit of private interests such as
designated individuals, the creator or his family — as evidenced by your research activities you are operating for
the benefit of the D family versus the public in general. An organization is not considered to be operated
exclusively for exempt purpose unless it serves a public rather than a private interest. As provided in Treas.
Reg. Section 1.501(c)(3)-1(d)(3)(i), you have not established that your operations accomplish exclusively
educational purposes.

As seen in Revenue Rulings 71-580 and 80-301, genealogical research can be an exempt activity that qualifies
under IRC Section 501(c)(3). In those rulings, the organization provided both religious and educational
justifications for performing and disseminating that research. However, you do not actively seek out public
individuals/members to instruct in general techniques, curate displays, participate in museum tours, or otherwise
seek to educate the public. You are more similar to the organization in Revenue Ruling 80-302, wherein the
efforts of your research are focused on a particular family. There is nothing in the administrative record to
suggest that you perform research outside of that family, and the results are provided almost exclusively to the
members of that family. You research a specific family for the purpose of providing the fruits of that research to
the members of that family; as a result any public benefit is incidental to the private purposes you serve.

Similar to Callaway Family and Benjamin Price Genealogical Association, you are not furthering educational or
religious purposes with your research activities. Your membership is almost if not exclusively family members;

Letter 4034 (Rev. 01-2021)
Catalog Number 47628K

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your focus is on the genealogy of one particular family/individual. Your activities serve private versus public
purposes more than incidentally as your research is not aimed at public dissemination for educational purposes.

Your position

Your response cited an internet blog concerning family association for conducting genealogical research under
Revenue Ruling 71-580. To date, specific facts and circumstances which support your exemption under
Revenue Ruling 71-580 have not been provided.

Our response to your position

The information you provided did not change our application of the law. Although you cited Revenue Ruling
71-580, you did not provide evidence as to how you are similar to this organization. You have submitted no
evidence that you are formed to further religious purposes.

Conclusion

You do not meet the standards of either the organizational and operational test because you have not shown you
are exclusively operated for exempt purposes. Thus, you do not meet the standards of exemption under IRC
Section 501(c)(3).

If you agree

If you agree with our proposed adverse determination, you don't need to do anything. If we don't hear from
you within 30 days, we'll issue a final adverse determination letter. That letter will provide information on
your income tax filing requirements.

If you don't agree

You have a right to protest if you don't agree with our proposed adverse determination. To do so, send us a
protest within 30 days of the date of this letter. You must include:

• Your name, address, employer identification number (EIN), and a daytime phone number

• A statement of the facts, law, and arguments supporting your position

• A statement indicating whether you are requesting an Appeals Office conference

• The signature of an officer, director, trustee, or other official who is authorized to sign for the
  organization or your authorized representative

• The following declaration:

For an officer, director, trustee, or other official who is authorized to sign for the organization:
Under penalties of perjury, I declare that I have examined this request, or this modification to the
request, including accompanying documents, and to the best of my knowledge and belief, the request
or the modification contains all relevant facts relating to the request, and such facts are true, correct,
and complete.

Your representative (attorney, certified public accountant, or other individual enrolled to practice before the
IRS) must file a Form 2848, Power of Attorney and Declaration of Representative, with us if they haven't
already done so. You can find more information about representation in Publication 947, Practice Before the
IRS and Power of Attorney.

We'll review your protest statement and decide if you gave us a basis to reconsider our determination. If so,
we'll continue to process your case considering the information you provided. If you haven't given us a basis

Letter 4034 (Rev. 01-2021)
Catalog Number 47628K

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for reconsideration, we'll send your case to the Appeals Office and notify you. You can find more information
in Publication 892, How to Appeal an IRS Determination on Tax-Exempt Status.

If you don't file a protest within 30 days, you can't seek a declaratory judgment in court later because the
law requires that you use the IRC administrative process first (IRC Section 7428(b)(2)).

Where to send your protest

Send your protest, Form 2848, if applicable, and any supporting documents to the applicable address:

U.S. mail: Street address for delivery service:

Internal Revenue Service Internal Revenue Service
EO Determinations Quality Assurance EO Determinations Quality Assurance
Mail Stop 6403 550 Main Street, Mail Stop 6403
PO Box 2508 Cincinnati, OH 45202
Cincinnati, OH 45201

You can also fax your protest and supporting documents to the fax number listed at the top of this letter. If you
fax your statement, please contact the person listed at the top of this letter to confirm that they received it.

You can get the forms and publications mentioned in this letter by visiting our website at www.irs.gov/forms-
pubs or by calling 800-TAX-FORM (800-829-3676). If you have questions, you can contact the person listed at
the top of this letter.

Contacting the Taxpayer Advocate Service

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that can help protect your
taxpayer rights. TAS can offer you help if your tax problem is causing a hardship, or if you've tried but haven't
been able to resolve your problem with the IRS. If you qualify for TAS assistance, which is always free, TAS
will do everything possible to help you. Visit www.taxpayeradvocate.irs.gov or call 877-777-4778.

We sent a copy of this letter to your representative as indicated in your power of attorney.

Sincerely,

Stephen A. Martin
Director, Exempt Organizations
Rulings and Agreements

cc:

Letter 4034 (Rev. 01-2021)
Catalog Number 47628K