IRS Rejects 2 Death Benefits Groups’ Requests for Tax-Exempt Status
April 15, 2020 by Allison Bell
The Internal Revenue Services (IRS) has refused to classify two member-owned organizations that provide death benefits for the members as tax-exempt organizations.
Stephen Martin, director for exempt organizations in the IRS Rulings and Agreements office, has delivered the news to the organizations in letter rulings that were issued in January and posted on the web today.
One of the organizations described itself as a community organization that would provide financial and counseling services for members who lose loved ones. That group was going to require members to contribute a certain amount of cash when another member died, then pay a specified amount of the cash to the bereaved member. The group was also going to offer members free seminars on topics such as Medicare and Social Security.
That organization applied for tax-exempt status under Internal Revenue Code Section 501(c)(4), which governs nonprofit civic leagues and other nonprofit social welfare organizations.
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