IRS PLR: Business League Exempt Status Denied to Housing Development on Account of Exclusive Membership Focus (IRC §501)

Organization formed by developers providing for the maintenance, preservation, and architectural control of the development while promoting the health, safety and welfare lot owners within the development doesn’t qualify for tax -exempt status under Section 501(c)(6), the IRS ruled. While qualifying Organization’s activities are directed toward the improvement of business conditions of one or more lines of business or for the common economic interests of all the businesses in a given trade community, the applicant’s activities are directed towards particular services and improvement of conditions for its members’ properties only, the IRS commented. [PLR 202126023]

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