Dog-genetics organization denied exemption for private benefit

Plain-English summary

An organization sought section 501(c)(3) exemption to collect, store, and distribute frozen semen from a particular dog breed and to support related education and research. Its sole member was a section 501(c)(4) breed club, its directors had to belong to that club, and only experienced club-member breeders could receive semen. The IRS found that these arrangements directly benefited the club's members and substantially promoted breed interests rather than exclusively charitable purposes. It also concluded that education was incidental to the semen program and that the organization had not shown that it conducted scientific research in the public interest. The IRS denied exemption because the organization failed the operational test and served substantial private and nonexempt purposes.

Ruling snapshot

• Question: Does the dog-genetics and semen-preservation organization operate exclusively for charitable, educational, or scientific purposes under section 501(c)(3)?
• Outcome: Denied
• Key authorities: IRC § 501(c)(3); Treas. Reg. § 1.501(c)(3)-1; Rev. Ruls. 71-421, 74-194, and 76-296

Full text (IRS public release)

~
,m Department of the Treasury Date:
Internal Revenue Service 02/27/2025
Tax Exempt and Government Entities Employer ID number:
IRS P.O. BOX 2508
CINCINNATI, OH 45201 Form you must file:
All
Tax years:
Release Number: 202521024
1120
Release Date: 5/23/2025
Person to contact:
UIL Code: 501.03-08,
501.03-24. 401.33-00

Dear

This letter is our final determinc1,tion 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 50l(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.1rs.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 oflntention 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 4 7632S

                    Sincerely,


                    Stephen A. Martin
                    Director, Exempt Organizations
                    Rulings and Agreements

Enclosures:
Letter 437
Redacted Letter 4034
Redacted Letter 403 8

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

f1'
IRS
Department of the Treasury
Internal Revenue Service
PO Box 2508
Cincinnati, OH 45201

                                                                           Date:
                                                                            01/08/2025
                                                                           Employer ID number:


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

Legend: UIL:
U = Club 501.03-08
V = University 501.03-24
X = Date of Formation 501.33-00
Y = State
Z=Dog

Dear

We considered your application for recognition of exemption from federal income tax under Internal Revenue
Code (IRC) Section 50l(a). We detennined that you don't qualify for exemption under IRC Section 50l(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 F01m 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501 (c)(3)
of the Internal Revenue Code.

You attest that you were incorporated on X, in the state of Y. 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 IRC Section 50l(c)(3).

You attest that you are organized and operated exclusively to further educational and scientific purposes. You
attest that you have not conducted and will not conduct prohibited activities under IRC Section 50l(c)(3).
Specifically, you attest you will:

• Refrain from supporting or opposing candidates in political campaigns in any way
• Ensure that your net earnings do not inure in whole or in part to the benefit of private shareholders or
individuals

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•   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 50 l (h)
•   Not provide commercial-type insurance as a substantial part of your activities

The Form 1023EZ states your mission is 1) educating the public regarding breeding and reproduction of the
purebred Z breed, 2) partnering with university and research centers regarding genetic diversity/breeding of the
Z breed 3) making distributions for such purposes to tax-exempt organizations.

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

You explained that your exempt purposes are to provide educational resources and scientific research related to
safeguarding the viability, continued existence, and genetic diversity of the Z breed. You explained your sole
member is U, an IRC Section 50l(c)(4) membership organization which is dedicated to promoting the Z breed.
U elects your board members from its membership. In addition to being a member ofU, your board members
are required to have extensive experience with the Z breed.

Your activities consist of collecting, storing, and distributing Z semen from Z purebred dogs. Z semen will only
be distributed to maiden Z female dogs owned by breeders who are U members in good standing with at least
five years' experience with the Z breed. You explained that these breeders must complete a detailed application
several months prior to the dog being expected in season and provide the dog's age, as well as her health status
and medical history. Recipients are then selected by a majority of your board. You will then require the breeder
pay a stud fee which will be established annually by your board. These fees will vary in relation to market
factors including the accomplishments of the donor animal and your storage costs. You further stated that while
a commercial breeder may set a fee based on demand or profitability, your purpose is to ensure Z viability.
Therefore, retention of semen is prioritized.

You also explained that you will establish specific requirements for the donation and receipt of semen. These
requirements include using basic breeding data such as name, age, pedigree, health, titles, and reproductive
history, among other things to determine if you will accept the donation. Donors must also have disclosed
health clearance from U 's Code of Ethics in effect at the time of collection.

You will prioritize collection of Z semen via a multi-step process. This consists of:
• At risk semen owned by Z breeders who arc no longer actively breeding and may consider abandoning
their frozen stock which may be decades old.
• Testamentary gifting permitting owners of Z frozen semen to donate that semen upon their death.
• Fresh collections from current Z dogs provided that you will not be in conflict with any stud dog.

You stated that you are partnering with V which is noted for its leadership in small animal reproduction to
capitalize on exposure and research opportunities. You store the semen at a commercial facility at V, in a tank
dedicated for your use, under the supervision of one of V's leading professors in the study of small animal

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reproduction. V charges you reduced rates per unit for storage. Because you collect data from the breeding of
the Z breed, you will provide samples for future research to this professor as well as provide data including the
age of the sample, date collected, pedigree, and name/age of the animal. Results ofresearch will be initially
published through V and later on your website for interested parties.

In addition, you explained that your operations enable V to advance its small animal breeding program, related
to the Z breed by providing V's veterinary students with hands-on, real-world experience in working with
semen, but not limited to, the freezing, preserving, shipping, and handling of, semen used for reproduction. You
provided no other details on your actual role in any educational or scientific efforts by V nor any evidence you
will offer internships or research positions. You also did not provide information on any formal educational
programs, nor did you identify any time or financial resources spent on research.

Further, you will design a website to target Z breeders, enthusiasts, veterinarians, and interested general public
members to build awareness to protect the Z breed in the need for genetically diverse and healthy Z dogs. The
website will contain educational content created by your board.

You will initially be supported by U who will provide funding to cover start-up costs. However, stud fees
eventually will be your main source of income. You explained that stud fees are central to your operations
because they facilitate the long-term storage of Z semen and particularly diverse samples of Z semen that would
otherwise be lost without such storage.

You may also receive donations from breeders, donations via your website, and receipts from fundraisers hosted
by U. Your expenses are primarily related to the collection, storage, and distribution of semen. You stated that
you will provide donations and grants to other IRC Section 501 (c)(3) organizations but did not provide any
financials which show evidence of this.

You explained that:
• Without you, there is no organization designed to preserve diverse biological samples of the Z breed's
semen and, given the high cost of storing frozen semen, storage by private breeders is not often a long-
tcnn viable option.
• Most dogs with semen valuable enough to command a very high sh1d fee are not expected to be the
animals from which semen is donated; rather, small breeders with less resources to continue to pay
storage costs, breeders who arc no longer breeding, and aging breeders without another possible
recipient for stored semen are likely to be those that donate to you.

Finally, we located a copy of your Articles oflncorporation's on Y's Secretaiy of State's website and provided
you a copy. They state you are organized and operated exclusively for charitable purposes within the meaning
of IRC Section 501 (c)(3 ). They further state your purposes are to a) educate members and the public regarding
breeding and reproduction of Z; b) partner with university and research centers related to genetic breeding of Z;
and c) make distributions to other 501 (c )(3) organizations.

Law
IRC Section 50l(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.

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Treasury Regulation Section 1.501 (c )(3)-1 ( a)(l) states that, in order to be exempt as an organization described
in IRC Section 50l(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 l.501(c)(3)-l(c)(l) 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)-l(d)(l)(ii) provides that an organization is not organized or operated
exclusively for one or more exempt purposes unless it serves a public rather than a private interest. To meet the
requirement of this subsection, the burden of proof is on the organization to show 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)(l) provides that an organization may be exempt as an organization
described in IRC Section 501 (c)(3) if it is organized and operated exclusively for the prevention of cruelty to
children or animals.

Treas. Reg. Section 1.50l(c)(3)-l(d)(2) provides that the tem1 "charitable," is used in section 501(c)(3) in its
generally accepted legal sense and includes the relief of the poor and distressed or of the underprivileged.

Treas. Reg. Section l.501(c)(3)-l(d)(3)(i) provides that the tenn "educational," as used in IRC Section
501 (c)(3 ), relates to:

   ( a) The instruction or training of the individual for the purpose of improving or developing
   his capabilities; or
   (b) The instruction of the public on subjects useful to the individual and beneficial to the
   community.

Treas. Reg. Section l.50l(c)(3)-l(d)(5)(i) states that scientific organizations must be organized and operated in
the public interest. It defines the term scientific as perfom1ing scientific research for public interest, rather than
private interest. Research is not synonymous with scientific, and to be scientific within IRC Section 50l(c)(3) it
must further a scientific purpose. Research has no distinction between fundamental or applied research.

Per Treas. Reg. Section l.50l(c)(3)-l(d)(S)(iv), an organization will not qualify as a scientific organization for
the purpose of carrying on research in the public interest for federal income tax purposes where (a) research will
be performed only for its creators (directly or indirectly), when its creators are not described in IRC Section
501 (c)(3) or (b) where substantial amounts of intellectual property that is developed is not made available to the
public, through various means.

Revenue Ruling 65-60, 1965-1 C.B. 231, held that an organization developing and disseminating a new body of
knowledge is exempt under IRC Section 501(c)(3). The organization did not perform contract research for
private benefit, performed research itself, worked with government agencies, and normally disseminated to the
public 90% of research results.

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

                                                       5

Rev. Rul. 69-526, 1969-2 C.B. 115, held an organization fanned for investigation by specialist doctors for
causes and treatment was exempt under IRC Section 50l(c)(3). The organization studied, researched, and
attempted to develop treatments and procedures for cardiac diseases. Results were published in journals,
lectures, and film. The organization qualified as obtaining scientific information and curing disease.

Rev. Rul. 71-421, 1971-2 C.B. 229, held that a dog club formed to promote the ownership and training of
purebred dogs and conduct obedience training classes didn't qualify for exemption under IRC Section
50l(c)(3).

Rev. Rul. 74-194, 1974-1 C.B. 129, held that an organization fonned to prevent the over breeding of cats and
dogs by providing funds to pet owners who wish to have their pets spayed or neutered but can't afford the cost
of such operations may qualify for exemption under IRC Section 501 (c )(3 ).

Rev. Rul. 76-152, 1976-1 C.B. 151, held that an organization formed by art patrons to promote community
understanding of modem art trends did not qualify for exemption under section 501(c)(3). The organization
exhibited and sold the artwork of local artists, who received 90 percent of sales proceeds. This provision of
direct benefits served the private interests of the artists and could not be dismissed as being merely incidental to
its other purposes and activities, and therefore the organization was not operated exclusively for educational
purposes.

Rev. Rul. 76-296, 1976-2 C.B. 142, held that commercially sponsored research otherwise qualifying as
scientific research under IRC Section 50l(c)(3), the results of which are timely published so as to be available
to the interested public, is scientific research carried on in the public interest. It states that scientific research
will be regarded as carried on in the public interest if it is for the purpose of obtaining scientific information.

In Better Business Bureau of Washington, D.C., Inc v. United States, 326 U.S. 279 (1945), the Supreme Court
held that the presence of a single non-exempt purpose, if substantial in nature, will destroy the exemption
regardless of the number or importance of truly exempt purposes.

In American Kennel Club, Inc. v. Hoey, 148 F.2d 920 (1945), the court held that the taxpayer wasn't exempt
from federal taxation under the predecessor to IRC Section 501(c)(3) because regulating the sport of dog shows
and field events doesn't further charitable, educational, or scientific purposes.

In Midwest Research Institute v. United States, 554 F. Supp. 1379 (W.D. Mo. 1983), affd 744 F.2d 635 (8 th
Cir. 1984), the court held that Midwest Research Institute did not jeopardize its tax-exempt status by conducting
research for private sponsors. The court stated that a project is scientific research "if professional skill is
involved in the design and supervision of a project intended to solve a problem through a search for a
demonstrable truth.'' The court stated that projects are "ordinary testing" if the work is generally repetitive and
done by scientifically unsophisticated employees to determine if the item tested meets certain specification, "as
distinguished from testing done to validate a scientific hypothesis."

In IIT Research Institute v. United States, 9 Cl. Ct. 13 (Cl. Ct. 1985), the U.S. Claims Court reviewed the
activities of an organization exempt under IRC Section 501(c)(3). The organization contracted with a variety of
industries to perform research for them. The court defined scientific as "the process by which knowledge is
systematized or classified through the use of observation, experimentation or reasoning." The organization was

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

                                                     6

only involved to the point where research principles were established. It did not conduct consumer or market
research. It did not engage in testing incident to commercial operations. Lastly, the sponsors took over once
research was completed. Due to these facts and circumstance, the court found the organization was not involved
in commercializing the results of research.

In City of Galveston, Texas v. United States, 33 Fed.Cl. 685, 707-08 (1995), the Court of Federal Claims ruled
that, the mere fact that another taxpayer has been treated differently from the plaintiff does not establish the
plaintifi's entitlement. The fact that all taxpayers or all areas of the tax law cannot be dealt with by the Internal
Revenue Service with equal vigor and that there thus may be some taxpayers who avoid paying the tax cannot
serve to release all other taxpayers from the obligation. The Commissioner's failure to assess deficiencies
against some taxpayers who owe additional tax does not preclude the Commissioner from assessing deficiencies
against other taxpayers who admittedly owe additional taxes on the same type of income. A taxpayer cannot
premise its right to an exemption by showing that others have been treated more generously, leniently, or even
erroneously by the IRS. The fact that there may be some taxpayers who have avoided paying a tax does not
relieve other similarly situated taxpayers from paying their taxes.

Application of Law
IRC Section 50l(c)(3) and Treas. Reg. Section l.501(e)(3)-l(a)(l) set forth two main tests for an organization
to be recognized as exempt. An organization must be both organized and operated exclusively for purposes
described in Section 501 (c)(3 ). Based on the information you provided in your application and supporting
documentation, we conclude you do not meet the operational test.

You are serving private interests.
An organization is not organized or operated exclusively for exempt purposes unless it serves a public rather
than a private interest as stated in Treas. Reg. Section l.50l(c)(3)-l(d)(l)(ii).

You are structured and are operated to advance the private interests ofU's members. This is evidenced by:
• U's members control your operations because your directors must be members ofU;
• Breeders who are U's members are the only eligible recipients of the semen you collect and store;
• Your directors who are U members select the breeders who may receive the semen;
• Your directors who are members of U establish stud fees.

Just like the artists in Rev. Rul. 76-152, who directly benefited by the exhibition and sale of their works, U' s
members are directly benefited by your operations. Although your activities may serve some exempt purposes,
as in Better Business Bureau, the presence of a substantial non-exempt purpose will preclude exemption, even if
also serving exempt purposes.

You are operated for substantial nonexempt purposes.
Treas. Reg. Section 1.50l(c)(3)-l(c)(l) provides that an organization will not be regarded as exempt under IRC
Section 50l(c)(3) or operated exclusively for one or more exempt purposes if more than an insubstantial part of
its activities is not in furtherance of an exempt purpose.

Your activities are designed to protect the Z breed standards. For example, your strict breeding standards and
the resource commitments to collection, storage, and distribution of Z semen, as well as the fact that all
recipients must be a member of U, illustrate you are operated to protect the Z breed and advance the interests of
U members, which serve substantial nonexempt purposes.

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

                                                       7

You have some similarities to the organization granted exemption in Rev. Rul. 74-194. However, the
organization in the Revenue Ruling was interested in controlling unwanted animals, preventing the starvation
and eventual euthanizing of the animal. You are designed to protect the Z breed for the benefit of U members
which is evident by how you are structured. Although some of your activities may further exempt purposes, you
also serve substantial independent purposes of a noncharitable nature. As in Better Business Bureau, the
presence of a substantial non-exempt purpose will preclude exemption, even if also serving exempt purposes.

Your activities are not exclusively charitable.
Your activities do not exclusively further a charitable purpose as required by Treas. Reg. Section l.50l(c)(3)-
l(d)(2). Your activities are primarily designed to protect the Z breed standards. This is evident through your
strict requirements for both the collection and distribution of Z semen and through the increasing time and
resource commitments to collection, storage, and distribution of Z semen. These activities do not fall under the
definition of chartable in Treas. Reg. Section 1.50l(c)(3)-l(d)(2).

Your activities are not exclusively preventing cruelty to animals.
Your activities do not exclusively further the prevention of cruelty to animals as required by Treas. Reg. Section
1.501 (c)(3 )-1 (d)( 1).

Unlike the qualifying organization described in Rev. Rul. 74-194, you are structured to protect the Z breed
standards for the benefit of U members. These activities do not prevent cruelty to animals as required by the
regulations.

Your activities are not exclusively educational.
Treas. Reg. Section l.50l(c)(3)-l(d)(3)(i) provides for exemption for organizations who accomplish exclusively
educational purposes. While you may aid in the instruction of V's students and educate the general public
through your website by publishing research conducted at V as well as by building interest and awareness about
the need for diverse and healthy Z semen, your primary activities are collecting, storing, and distributing Z
semen. Your aid to the instruction of V's students is dependent on the accomplishment of your primary
activities. Further, like the organizations in Rev. Rul. 71-421 and American Kennel Club, Inc., you primarily
focus on the breed standards of Z dogs. This is evidenced by your extensive evaluation process in place and that
only Z breeders who are U members are permitted to receive semen. All of these factors combine to make your
educational efforts incidental to your primary activity. In addition, you did not provide information on any
formal educational programs.

Therefore, you have not shown that your activities arc exclusively conducted to provide instruction or training
"useful to the individual and beneficial to the community" within the meaning of Treas. Reg. Section
1.501 (c)(3)- l (d)(3)(i).

You are not a scientific organization.
Treas. Reg. Section l.50l(c)(3)-l(d)(5)(i) states that scientific organizations must be organized and operated in
the public interest. It defines the term scientific as performing scientific research for public interest, rather than
private interest. Research is not synonymous with scientific, and to be scientific within IRC Section 501 (c)(3, it
must further a scientific purpose.

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                                                     8

Further, the law defines "scientific" as systemizing knowledge, involving professional skill, and testing
scientific hypotheses, and obtaining scientific information. See Rev. Rul. 76-296, IIT Research Instih1te, and
Midwest Research Institute.

You provided no information that you arc conducting scientific research. You are collecting data from the Z
breed and making it available to veterinaiy students at Vas well as to one of V's leading professors. You
provided no other details on your actual role in any educational or scientific efforts by V nor any evidence you
will offer internships or research positions. You also did not provide any time or financial resources spent on
research.

Further, because membership is required in U for breeders to receive Z semen and you are controlled by U
members, you do not qualify as a scientific organization as explained in Treas. Reg. Section l.50l(c)(3)-
l(d)(5)(iv)(a). The members ofU directly benefit from your activities. You arc dissimilar to the organizations
described in Rev. Rul. 65-60 and Rev. Rul. 69-526 in that you are serving substantial private interests.

Therefore, you are not operated for the purpose of carrying on scientific research in the public interest and you
do not qualify as a scientific organization within the meaning ofIRC Section 50l(c)(3).

Your position
You stated the following reasons why you feel the IRS decision is incorrect:

1. Protection of genetic diversity is not protection of breed standards. The central focus of your argument is
   that your goal is to reduce genetic abnormalities or diseases. You differentiate this from breed standards
   to the animals.
2. You feel that we minimized the educational component of your activities inappropriately. This
   specifically includes the recognition of education as a core component, advancing an argument under
   Treas. Reg. Section l .50l(c)(3)-l(d)(3)(i), particularly through your partnership with V.
3. You assert that we ignored the scientific component of your operations, which is of a highly specialized
   discipline, taught at a few schools per the attestation of one of the leading professors of V, which would
   translate to other species.
4. You stated that an organization whose operations you believe are similar to yours is exempt under IRC
   Section 501(c)(3) and therefore you should be recognized for exemption under Section 50l(c)(3).
5. You explained that timeliness of processing your Form 1023 is a mitigating factor. Specifically, your
   complaint is that your case was handled by three different revenue agents, required three additional
   information letters, which caused delay and cost increases, exacerbated by perceived inconsistency and
   opacity.

Our response to your position
You have not provided any information proving that you meet the requirements of IRC Section 501 (c)(3 ).

Concerning Arguments 1, 2, and 3, although you may have some exempt purposes, you are also operated for
substantial nonexempt purposes as previously explained. For example, you are serving the private interests of
the members of U and promoting the Z breed. These are substantial nonexempt purposes. As in Better Business
Bureau.the presence of a substantial non-exempt purpose will preclude exemption.

Concerning Argument 4, the facts and issues concerning the alleged tax-exempt status of that organization is
not relevant to our determination here. Disparate treatment claims are not supported by the law. In City of

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                                                     9

Galveston, Texas v. United States, the court stated the mere fact that one taxpayer has been treated differently
from another taxpayer does not establish the other's entitlement. The fact that all taxpayers or all areas of the tax
law cannot be dealt with by the Service with equal vigor and that there may be some taxpayers who avoid
paying the tax, cannot serve to release all other taxpayers from the obligation. As such, a taxpayer cannot
premise its right to an exemption by showing that others have been treated more generously, leniently, or even
erroneously by the IRS.

Concerning Argument 5, the Form 1023-EZ application including attestations along with any additional
information requested by the Service and provided by the organization to establish that it satisfies the
requirements for tax-exempt status under IRC Section 50l(c)(3). Additionally, even though an application is
complete, the Service may request additional information before issuing a detern1ination letter. See Rev. Proc.
2024-5, 2024-1 I.R.B. 262, Section 6.07(2)(b) and (3). Separately, outside of the actions of the Service, you
may follow the steps outlined in Rev. Proc. 2024-5, Section 10.06.

Conclusion
Based on the infom1ation submitted, you fail the operational test under IRC Section 50l(c)(3). You are operated
for substantial nonexempt purposes, serving private interests, and not exclusively furthering charitable,
educational, or scientific purposes. Accordingly, you do not qualify for exemption under Section 50l(c)(3).
Your donors may not deduct contributions.

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 infonnation about representation in Publication 947, Practice Before the
IRS and Power of Attorney.

                                                                                    Letter 4034 {Rev. 01-2021)
                                                                                    Catalog Number 4 7628K

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


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