Dog-training club denied charity status because dogs were the primary trainees

Plain-English summary

The IRS denied IRC § 501(c)(3) recognition to a membership organization that conducted dog training, seminars, and competitive event trials for members and their dogs. Members paid a monthly fee, activities occurred several times per week, and expenses supported equipment and event trials. Although dog owners received some instruction, the IRS concluded that the dogs were the primary objects of the training and evaluation. Training animals for competitive events is not an educational purpose within section 501(c)(3), unlike instruction teaching blind individuals to function with guide dogs. The dog-training and event-trial activity was a substantial nonexempt purpose, so the organization failed the operational test.

Ruling snapshot

• Question: Does a member dog-training and competitive-event organization operate exclusively for educational purposes under IRC § 501(c)(3)?
• Outcome: Denied, because training and evaluating dogs for competitive events was a substantial nonexempt purpose
• Key authorities: IRC § 501(c)(3); Treas. Reg. § 1.501(c)(3)-1(a), (c), (d)(3); Rev. Rul. 71-421; Rev. Rul. 73-456; Ann Arbor Dog Training Club, Inc. v. Commissioner

Full text (IRS public release)

Department of the Treasury Date:
Internal Revenue Service 05/30/2025
Tax Exempt and Government Entities
P.O. Box 2508
Cincinnati, OH 45201

Employer ID number: [redacted]
Person to contact: [redacted]

Release Number: 202534007
Release Date: 8/22/2025
UIL Code: 501.00-00, 501.03-00, 501.03-30, 501.35-00

Dear [redacted]:
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
Letter 4038

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

Department of the Treasury
Internal Revenue Service
PO Box 2508

Cincinnati, OH 45201

Date: 04/14/2025
Employer ID number: [redacted]
Person to contact:
Name: [redacted]
ID number: [redacted]
Telephone: [redacted]
Fax: [redacted]

Legend: UIL:
C = Date 501.00-00
B = State 501.03-00
D = Number Range 501.03-30
y dollars = dollar amount 501.35-00

Dear Applicant:

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 on C, in the state of B. 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 the 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
• Ensure that your net earnings do not inure in whole or in part to the benefit of private shareholders or
  individuals

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

2

• 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. You stated your activities consist of
dog training, dog training seminars, and event trials for members and their dogs. Activities are conducted D
times per week in parks or member homes. You are a membership organization with a monthly membership fee
of y dollars. Your members set the monthly membership fee. Expenses are for equipment and associated costs
for conducting event trials.

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.

Treasury Regulation 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(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)(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 71-421, 1971-2 C.B. 229, held that a dog club, exempt under IRC Section 501(c)(7), formed to
promote the ownership and training of purebred dogs which conducted obedience training classes, could not be
reclassified as an educational organization exempt under IRC Section 501(c)(3).

Rev. Rul. 73-456, 1973-2 C.B. 342, held that a training center established to instruct the blind to properly
function with the aid of guide dogs met the operational test under IRC 501(c)(3). They have programs to train
dogs to lead and assist the blind, and to instruct them to function with their dogs. The organization's program,
consisting of detailed instruction of blind persons in the use and care of guide dogs, is a ‘curriculum’ within the
meaning of the applicable section of the Code. Furthermore, the organization has a regular group of instructors
and an enrolled body of students in regular attendance at a designated place where the instruction of the students
is carried on at regular sessions. Accordingly, the organization was found to be exempt as a school under
Section 501(c)(3).

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

3

In Ann Arbor Dog Training Club, Inc. v. Commissioner, 74 T.C. 207 (1980), the court held that the training
of animals does not come within the meaning of “educational” as set forth in IRC Section 501(c)(3). The
organization conducted dog obedience training classes, awarded the dogs a degree after completion, and
awarded them prizes at show events. While the dog owners received some instruction as to the training

of the dogs, it was the dog that was the primary object of the training and evaluation.

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 a claim for
exemption regardless of the number or importance of truly exempt purposes.

Application of law
You are not described in IRC Section 501(c)(3) because you don't meet the operational test outlined in Treas.
Reg. Section 1.501(c)(3)-1(a)(1).

You are not operating exclusively for educational purposes as required under Treas. Reg. Sections 1.501(c)(3)-
1(c)(1). Your primary activity is dog training for competitive dog event trials. 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.

Like the organizations in Rev. Rul. 71-421 and Ann Arbor Dog Training Club, your dog training for
competitive dog event trial activities do not come within the meaning of educational as defined in the
regulations. Dog owners may receive some instruction, but it is the dogs that are the primary object of the
training and evaluation. You are dissimilar to Rev. Rul. 73-456 where the primary focus of training was on the
individual to properly function with aid of guide dogs.

You are similar to Better Business Bureau because your dog training and event trials constitute a substantial,
nonexempt purpose that precludes exemption under IRC Section 501(c)(3).

Conclusion

You do not qualify for tax exemption under IRC Section 501(c)(3) because you are operated for a substantial
non-exempt purpose and fail the operational test. Specifically, you are not exclusively furthering educational
purposes because you primarily train dogs and complete in dog events. Therefore, you do not qualify for tax
exemption under 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

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

4

• 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
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.

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

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.

Sincerely,

Stephen A. Martin
Director, Exempt Organizations
Rulings and Agreements

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