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nization whose membership is limited to the employees of an employer in a particular municipality and whose primary purpose is to obtain for its members discount prices on merchandise, services, and activities is not exempt as a local association of employees under section 501(c)(4). §1.501(c)(4)-1. (Sec. 501, ’86 Code.) Rev. Rul. 79-128, 1979-1 C.B. 197. 218.359 Employees’ association; membership. For purposes of section 501(c)(4) the term “employees” includes retired employees who were members of an employees’ association at the time of retirement. §1.501(c)(4)–1. (Sec. 501, ’86 Code.) Rev. Rul. 74-281, 1974-1 C.B. 133. 218.360 Employees’ association; operating bus for members. An organization whose primary purpose is the operation of a bus for the convenience of its members, using the income from fares to pay expenses, is not exempt as a local association of employees. §§39.101(8)-1, 1.501(c)(4)-1. (Sec. 101(8), ’39 Code; Sec. 501, ’86 Code.) Rev. Rul. 55-311, 1955-1 C.B. 72. 218.361 Employees’ association; operating gasoline station. An employees’ association organized exclusively for recreational purposes operates a gasoline station on property owned by the employer of its members. Sales are limited to its members and to the employer company, and income is used exclusively for members’ recreation. Neither the operation of the gasoline station, nor the selling of gasoline and oil to the employer company adversely affects the association’s qualification for exemption since all of its income is used for recreational purposes, and the income from sales to the employer is considered a form of employer support of the association. §1.501(c)(4)-1. (Sec. 501, ’86 Code.) Rev. Rul. 66-180, 1966-1 C.B. 144. 218.362 Employees’ association; retirement or death benefits. An organization of employees whose purpose is to pay lump sum retirement benefits to its eligible members or death benefits to their survivors does not qualify for exemption. §1.501(c)(4)-1. (Sec. 501, ’86 Code.) Rev. Rul. 66-59, 1966-1 C.B. 142. 218.363 Employees’ beneficiary association; obsolete procedures. Rev. Proc. 66-30 is declared obsolete with respect to future transactions of section 501(c)(9) organizations. §§1.501(c)(9)-1, 301.7805-1. (Sec. 601.201, S.P.R.; Secs. 501, 7805, ’86 Code.) Rev. Proc. 82-46, 1982-2 C.B. 788. 218.364 Employees’ beneficiary association; obsolete rulings. Certain rulings are declared obsolete with respect to future transactions of section 501(c)(9) organizations. Rev. Ruls. 57–61, 57-494, 58-442, 59-28, 64–258, and 65–81 obsolete. §§1.501(c)(9)-1, 301.7805-1. (Secs. 501, 7805; ’86 Code.) Rev. Rul. 82-148, 1982-2 C.B. 401. 218.365 Employees’ beneficiary association; reimbursed medicare premium. A section 501(c)(9) organization does not jeopardize its exemption by reimbursing its members for premiums paid under the medical benefits program (medicare) provided under the Social Security Amendments of 1965. (Sec. 501, ’86 Code.) Rev. Rul. 66-212, 1966-2 C.B. 230. 218.366 Employees’ beneficiary association; workmen’s compensation benefits. An association formed by a corporation to provide workmen’s compensation benefits that the corporation was already obligated to pay under State law does not qualify for exemption. (Sec. 501, ’86 Code.) Rev. Rul. 74-18, 1974-1 C.B. 139. 218.367 Employees’ pensions; discretionary distribution. An exempt organization’s payment of reasonable pensions to retired employees at the discretion of its board of directors does not adversely affect its exempt status. §1.501(c)(3)–1. (Sec. 501, ’86 Code.) Rev. Rul. 73-126, 1973-1 C.B. 220. 218.368 Employees’ trust. A trust organized primarily to pay pensions to retired employees, and to provide incidental benefits to employees or their beneficiaries in times of need, is not exempt as a charitable organization. Contributions to such a trust are not deductible by the donors as charitable contributions. (Secs. 170, 501; ’86 Code.) Rev. Rul. 56-138, 1956-1 C.B. 202. 218.369 Employment assistance to the elderly. A corporation organized to rehabilitate unemployed persons over a stated age by educating the general public in the special qualifications of such persons, combating prejudice against employment of such persons, and securing employment of its members, is not exempt from tax as a charitable organization where the members were the beneficiaries and expected to contribute to the organization in return for the benefits secured. However, the corporation may qualify for exemption as a civic organization. Distinguished by Rev. Rul. 66-257. §1.501(c)(4)-1. (Sec. 501, ’86 Code.) Rev. Rul. 57-297, 1957-2 C.B. 307. 218.370 Employment assistance to the elderly. A nonprofit organization which aids elderly unemployed persons of limited means in obtaining employment by providing them with free services and by educating the public in the employment capabilities of elderly persons qualifies for exemption. Rev. Rul. 57–297 distinguished. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 66-257, 1966-2 C.B. 212. 218.371 Engineering society; heating and air conditioning. An engineering society formed to advance the arts and sciences of heating, ventilating, and air conditioning for the benefit of the general public by providing facilities for research and the dissemination of scientific knowledge qualifies for exemption. §§1.501(c)(3)-1, 1.501(c)(6)-1. (Sec. 501, ’86 Code.) Rev. Rul. 71-506, 1971-2 C.B. 233. 218.372 Environmental conservancy. A nonprofit organization formed for the purpose of preserving the natural environment by acquiring, by gift or purchase, ecologically significant undeveloped land, and either maintaining the land itself with limited public access or transferring the land to a government conservation agency by outright gift or being reimbursed by the agency for its cost, qualifies for exemption. Distinguished by Rev. Rul. 78-384. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 76-204, 1976-1 C.B. 152. 218.373 Environmental conservancy. A nonprofit organization that owns farmland and restricts its use to farming or other uses the organization deems ecologically suitable, but is not operated for the purpose of preserving ecologically significant land and does not otherwise establish that it serves a charitable purpose, does not qualify for exemption under section 501(c)(3). Rev. Rul. 76-204 distinguished. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 78-384, 1978-2 C.B. 174. 218.374 Environmental disputes; international mediation. An otherwise qualifying organization that engages in legal research concerning various means of adjusting and resolving international environmental disputes and arranges for, and participates in, the resolution of such disputes Exempt organizations through mediation is exempt from tax. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 80-279, 1980-2 C.B. 176. 218.375 Environmental protection; litigation. An otherwise qualifying organization that was formed to protect and restore environmental quality and whose principal activity consists of instituting litigation as a party plaintiff to enforce environmental legislation is operated exclusively for charitable purposes and qualifies for exemption. §1.501(c)(3)–1. (Sec. 501, ’86 Code.) Rev. Rul. 80-278, 1980-2 C.B. 175. 218.376 Equal job opportunities. A nonprofit organization formed to advance equal job opportunities for qualified workers discriminated against because of race or creed may qualify for exemption. §1.501(c)(3)–1. (Sec. 501, ’86 Code.) Rev. Rul. 68-70, 1968-1 C.B. 248. 218.377 Equal rights; construction trade. A nonprofit organization formed to eliminate discrimination against members of minorities seeking employment in the construction trades by recruiting, educating, and counseling workers, providing technical assistance to attorneys involved in suits to enforce workers’ rights, and acting as court-appointed monitor after successful suits, is organized and operated exclusively for charitable and educational purposes. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 75-285, 1975-2 C.B. 203. 218.378 Equal rights for women. An organization formed to promote equal rights for women by investigating instances of discrimination in employment and other economic opportunities and to aid women in recognizing and dealing with discrimination qualifies for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 72-228, 1972-1 C.B. 148. 218.379 Evaluating scientific and medical literature. An organization formed to survey medical and scientific articles published throughout the world and to abstract selected articles of note in a monthly publication that is distributed free to interested parties requesting to be put on the mailing list is exempt from tax. §1.501(c)(3)–1. (Sec. 501, ’86 Code.) Rev. Rul. 66-147, 1966-1 C.B. 137. 218.380 Family controlled foundation. A foundation controlled by the creator’s family, operated to enable the creator and his family to engage in financial activities beneficial to them, results in the foundation’s ownership of non-income-producing assets which prevents its carrying on a charitable program commensurate in scope with its financial resources is not entitled to exemption. §1.501(c)(3)–1. (Sec. 501, ’86 Code.) Rev. Rul. 67-5, 1967-1 C.B. 123. 218.381 Farm bureaus; unrelated income. A county-wide organization engaged in the advancement and improvement of agriculture may be considered to be tax exempt. Any income it receives from the sale of supplies and equipment to members, however, is taxable as unrelated business income. (Sec. 501, ’86 Code.) Rev. Rul. 57-466, 1957-2 C.B. 311. 218.382 Feeder organizations purchasing agency. A corporation, organized and operated for the primary purpose of operating and maintaining a purchasing agency for the benefit of its otherwise unrelated members who are exempt charitable organizations, is engaged in business activities which would be unrelated activities if carried on by any one of the tax-exempt organizations served, and therefore, is not entitled to exemption. §39.101-2. (Sec. 101, ’39 Code; Sec. 501, ’86 Code.) Rev. Rul. 54-305, 1954-2 C.B. 127. 218.383 Film festival sponsorship. A nonprofit organization formed to promote the art of
Exempt organizations filmmaking by conducting annual festivals to provide unknown independent filmmakers with opportunities to display their films and by sponsoring symposiums on filmmaking qualifies for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 75-471, 1975-2 C.B. 207. 218.384 Financial assistance association. An organization formed to provide financial assistance to different types of exempt organizations and carries on no operations other than to receive contributions and incidental investment income, which is not accumulated, and to make distributions of income to such organizations at periodic intervals, is exempt from tax. I.T. 1945 superseded. §1.501(c)(3)–1. (Sec. 501, ’86 Code.) Rev. Rul. 67-149, 1967-1 C.B. 133. 218.385 Foreign charitable activities; domestic corporation. A domestic corporation that conducts a part or all of its charitable activities in foreign countries is not precluded from exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 71-460, 1971–2 C.B. 231. 218.386 Foreign educational program. A nonprofit organization that selects students and faculty members who are interested in a particular foreign history and culture and enrolls them in foreign universities, transports them to and from that country, and conducts on-site tours qualifies for exemption. Rev. Rul. 67–327 distinguished. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 69-400, 1969-2 C.B. 114. 218.387 Foreign exchange program. An otherwise qualifying organization that was formed to foster the cultural and educational development of children by arranging for, and participating in, the temporary exchange of children between families of a foreign country and the U.S. qualifies for exemption. Fees paid by the participating families equal to the cost of travel and insurance and the expenses incurred on behalf of the foreign child while living in the U.S. family’s household are not charitable contributions. However, contributions from a participating family that exceed the fair market value of the services received from the program are deductible. Rev. Rul. 67-327 distinguished. §§1.170A-1, 1.501(c)(3)-1. (Sec. 170, 501; ’86 Code.) Rev. Rul. 80-286, 1980-2 C.B. 179. 218.388 Foreign exchange program; Latin American assistance. A domestic nonprofit corporation (composed of educational, civic, business, and other groups) that joins with a counterpart group in a country in Latin America to promote student and cultural exchanges and to provide technical and material assistance for selfhelp projects designed to improve the living conditions of underprivileged people in Latin America may be exempt from tax. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 68–165, 1968-1 C.B. 253. 218.389 Foreign language magazine. A nonprofit corporation that publishes a foreign language magazine containing fiction, poetry, book reviews and articles alleged to be of a literary, scientific and educational character and available to the general public through regular paid subscriptions does not qualify for exemption. Distinguished by Rev. Rul. 67–4. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 60-351, 1960-2 C.B. 169. 218.390 Foreign news translation service. A nonprofit corporation whose primary purpose is to increase international understanding by making world opinions and events available through translations from the foreign press qualifies for exemption under section 501(c)(3). (Sec. 501, ’86 Code.) Peoples Translation Service/Newsfront International, 72 T.C. 42, Acq., 1981–2 C.B. 2. 218.391 Foreign organization. An organization formed under foreign law which meets the tests for exemption under section 501(a) qualifies as an exempt organization. §1.501(a)-1. (Sec. 501, ’86 Code.) Rev. Rul. 66-177, 1966-1 C.B. 132. 218.392 Foreign students and visitors hospitality center. A nonprofit corporation organized to extend hospitality to foreign visitors and students, promote cultural and educational programs, and provide an environment for social contact between American citizens and foreign visitors and students and accomplishes these purposes by maintaining and operating a community or hospitality center is, under the circumstances, exempt from tax. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 65-191, 1965-2 C.B. 157. 218.393 Foreign travel; student and faculty group tours. A nonprofit organization formed for the purpose of arranging group tours for students and faculty of a university to allow them to travel abroad and which has no other activities is not exempt from tax. Distinguished by Rev. Ruls. 69-430 and 80-286. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 67-327, 1967-2 C.B. 187. 218.394 Fraternal beneficiary society. A fraternal beneficiary society that operates under the lodge system and provides for member benefit payments may qualify for exemption regardless of whether the fraternal or the insurance features predominate, as long as both features are present; I.T. 1516 superseded. §1.501(c)(8)-1. (Sec. 501, ’86 Code.) Rev. Rul. 73-165, 1973-1 C.B. 224. 218.395 Fraternal beneficiary society; beneficial and social members. An organization operating as a fraternal beneficiary society under the “lodge system” which has two classes of members, but only one is eligible to receive benefits, is exempt from tax provided there is a legitimate reason for restricting benefit payments to a certain membership class and the benefit fund from which payments are made is segregated from the organization’s general fund so that there is no inurement of income from non-beneficial members to pay benefits to beneficial members. §1.501(c)(8)-1. (Sec. 501, ’86 Code.) Rev. Rul. 64-194, 1964–2 C.B. 149. 218.396 Fraternal beneficiary society; legal defense fund for law enforcement officers. A fraternal beneficiary society, composed of law enforcement officers and operating under the lodge system, that provides legal expenses to defend members accused of criminal, civil, or administrative misconduct arising in the course of their employment, provides “other benefits” within the meaning of section 501(c)(8). §1.501(c)(8)-1. (Sec. 501, ’86 Code.) Rev. Rul. 84-48, 1984-1 C.B. 133. 218.397 Fraternal beneficiary society; optional insurance. A domestic fraternal beneficiary society of farmers operated under the lodge system that does not itself provide for the payment of life, sick, accident, or other benefits to its members, but arranges with insurance companies to provide optional insurance to its members and devotes its net earnings exclusively to religious, charitable, scientific, literary, educational, and fraternal purposes does not qualify for exemption under section 501(c)(8) but does qualify under section 501(C)(10). §§1.501(c)(8)-1, 1.501(c)(10)-1. (Sec. 501, ’86 Code.) Rev. Rul. 76-457, 1976-2 C.B. 155. 218.398 Fraternal beneficiary society; orphanage for deceased members’ dependent children. A fraternal beneficial society that operates an orphanage for surviving children of deceased members provides “other benefits” within the meaning of section 501(c)(8). §1.501(c)(8)-1. (Sec. 501, ’86 Code.) Rev. Rul. 84-49, 1984-1 C.B. 134. 218.399 Fraternal beneficiary society; separate support organization. An organization not operating under the lodge system, whose sole activity is to provide life, sick, and accident benefits exclusively for members of a fraternal beneficiary society operating under the lodge system, may qualify for exemption. §1.501(c)(8)–1. (Sec. 501, ’86 Code.) Rev. Rul. 73-192, 1973–1 C.B. 224. 218.400 Fraternal beneficiary society; separate support organization. An organization that does not conduct any fraternal activities or operate under the lodge system, but does operate exclusively for the benefit of members of certain related domestic fraternal societies operating under the lodge system, does not qualify for exemption under 1.501(c)(10)-1. (Sec. 501, ’86 Code.) Rev. Rul. 81-117, 1981–1 C.B. 346. section 501(c)(10). §§1.508(c)(8)-1, 218.401 Fraternal beneficiary society; statesponsored reinsurance pool. A fraternal beneficiary society that conducts an insurance operation for its members in all 50 states does not lose its exempt status by participating in a state sponsored reinsurance pool that protects participating insurers from excessive losses on major medical health and accident insurance. §1.501(c)(8)–1. (Sec. 510, ’86 Code.) Rev. Rul. 78-87, 1978–1 C.B. 160. 218.402 Fraternal beneficiary society; subordinate organization formed by local lodge. A nonprofit, subordinate organization, formed and charted by a local lodge of a fraternal beneficiary society exempt from tax under section 501(c)(10) to carry on the fraternal and charitable activities of the society in a particular geographical area, is also exempt. §1.501(c)(10)-1. (Sec. 501, ’86 Code.) Rev. Rul. 73-370, 1973-2 C.B. 184. 218.403 Fraternal beneficiary society; whole life insurance with investment features. Whole life insurance constitutes a life benefit under section 501(c)(8) even though the policies contain investment features such as cash surrender value and policy loan. §1.501(c)(8)–1. (Sec. 501, ’86 Code.) Rev. Rul. 86-75, 1986-1 C.B. 245. 218.404 Fraternal society; promotion of fortune telling method. A domestic fraternal society operating under the lodge system, which does not provide life, sick, accident, or other benefits, whose members are interested in the use of and philosophy behind a method of attempting to divine the future, and whose net income is used to provide instruction on the use of the method, maintain a reference library, and supply information on the method to the public, qualifies for exemption under section 501(c)(10). §1.501(c)(10)-1. (Sec. 501, ’86 Code.) Rev. Rul. 77-258, 1977-2 C.B. 195. 218.405 Fraternity chapter house. An organization does not qualify for exemption under section 501(c)(3) as an educational organization where its primary activity is to furnish, on a rental basis, a chapter house to a fraternity. However, a corporation, fund, or foundation so organized may, under proper circumstances, be classified as a club organized and operated exclusively for pleasure, recreation and other nonprofitable purposes and exempt under section 501(c)(7). §§1.501(c)(3)-1, 1.501(c)(7)-1. (Sec. 501, ’86 Code.) Rev. Rul. 64-118, 1964-1 (Part 1) C.B. 182. 218.406 Garden clubs. Illustrations under which garden clubs may establish exemption as charitable or educational organizations, civic
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