IRS denies 501(c)(4) status to a sorority support association

Plain-English summary

The IRS issued a final adverse determination denying tax-exempt status under IRC § 501(c)(4) to an association formed by parents and guardians of sorority members. The association provided meals, care packages, facility improvements, and other support to the sorority's undergraduate members. The IRS concluded that these activities primarily benefited a select group rather than the community as a whole, so the organization did not operate exclusively for social welfare. It therefore denied exemption under § 501(c)(4).

Ruling snapshot

• Question: Does the sorority support association qualify for exemption under IRC § 501(c)(4)?
• Outcome: Denied.
• Key authorities: IRC §§ 501(a), 501(c)(4), 501(c)(5), 501(h), 6110, and 7428(b)(2); Treas. Reg. §§ 1.501(c)(4)-1(a)(1) and (a)(2)(i); Rev. Ruls. 73-306 and 73-349; Commissioner v. Lake Forest, Inc., 305 F.2d 814 (4th Cir. 1962).

Full text (IRS public release)

Department of the Treasury Date:
Internal Revenue Service 06/10/2026
Tax Exempt and Government Entities Employer ID number:

Form you must file:

Tax years:

Person to contact:

Release Number: 202636016 Name:
Release Date: 9/4/26 ID number:
UIL Code: 501.04-00, 501.33-00 Telephone:
Dear

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)(4). 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.

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.

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

Enclosures:

Letter 437

Redacted Letter 4034
Redacted Letter 4038

cc:

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

Department of the Treasury
Internal Revenue Service

Date:
04/20/2026
Employer ID number:

Person to contact:

Name
ID number
Telephone
Fax
Legend: UIL:
B = Date 501.04-00
C = State 501.33-00

• = Entity
  E = Entity

f percent = Percent
Dear

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)(4). This letter explains the reasons for our conclusion. Please keep it for your records.

Issues 7
Do you qualify for exemption under IRC Section 501(c)(4)? No, for the reasons stated below.

Facts
You incorporated on B, in the state of C. Your Articles of Incorporation state that you are formed to support

members of D sorority at E by providing meals, treats, support supplies, funding and other support needed within the meaning of IRC Section 501(c)(4).

You have one class of membership. Your membership is limited to parents or guardians of undergraduate students who are active members of the D at E. Members are required to pay dues annually and are encouraged to participate in your activities, ocluding volunteer support to student welfare initiatives. Members are not entitled to vote at any meetings and are structured solely to facilitate participation in and support of your exempt purposes, including the well-being and educational engagement of D members.

You promote student success, engagement in academic life, and personal well-being by providing meals, wellness-focused care packages, and limited facility improvements to enhance the living and learning environment. Your primary activity is the provision of meals and wellness-focused care packages to undergraduate members of D during academically demanding periods of the year. You dedicate approximately f percent of your overall time and financial resources on these activities.

Letter 4634 (Rev. 01-2021)
Catalog Number 47628K

2

The remainder of your time and financial resource are dedicated to facility and wellness-related improvements. Past improvements have included the purchase and installation of a water fountain and bottle-filling station. Activities are carried out by volunteer officers and members.

Law
IRC Section 501(c)(4) provides for the exemption from federal income tax of organizations not organized for profit but operated exclusively for the promotion of social welfare

Treasury Regulation Section 1.501(c)(4)-1(a)(1) states a civic league or organization may be exempt as an organization described in IRC Section 501(c){4) if it is not organized or operated for profit and it is operated exclusively for the promotion of social welfare.

Treasury Regulation Section 1.501(c)(4)-1(a)(2)(i) states that an organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community. An organization embraced within this section is one which is operated primarily for the purpose of bringing about civic betterment and social improvements.

Revenue Ruling 73-306, 1973-2 C.B. 179, provides that an organization formed for the purpose of promoting the common interest of tenants who reside in a particular apartment complex does not qualify for exemption under IRC Section 501(c)(4). The organization represented its member-tenants in negotiations with the management of the complex to secure better maintenance and services, as well as reasonable rents. The ruling holds that the organization was not described in IRC Section 501(c)(4) because it operated essentially to benefit its members and, thus, was not primarily engaged in activities that promote the common good and general welfare of the community.

Rev. Rul. 73-349, 1973-2 C.B. 179, describes an organization that was formed to purchase groceries for its membership at the lowest possible prices. It received orders from its members, consolidated them, and purchased the food in quantity. Each member paid for the cost of his food, and each member was assessed an equal monthly service charge for the monthly operating costs. Membership was open to all individuals in a particular community. This revenue ruling stated that the organization was a private cooperative enterprise for the economic benefit or convenience of its members. Citing Commissioner v. Lake Forest, Inc., below, this ruling stated that the organization operated primarily for the private benefit of members. Any benefits to the community were not sufficient to meet the requirement of the regulations that the organization operate primarily for the common good and general welfare of the people of the community. Accordingly, it did not qualify for exemption under IRC Section 501(c)(4).

In Commissioner v. Lake Forest, Inc, 305 F.2d 814 (4th Cir. 1962}, the court held that the organization was not described in IRC Section 501(c)(4) because it was "a public-spirited but privately devoted endeavor" that provided only incidental benefit to the community. The organization did not promote social welfare because it furnished housing only to a certain group of individuals, rather than on a community basis, and did not offer a service or program for the direct betterment or improvement of the community as a whole.

Application of law

You are not described in IRC Section 501(c)(4) and Treas. Reg Section 1.501(c)(4)-1(a)(1) because your activities do not exclusively promote social welfare. You engage in activities which exclusively benefit individuals of D sorority. Exclusively benefiting a select group of individuals does not serve the common good

Letter 4034 (Rev. 04-2021)
Catalog Number 47628K

3

and general welfare of the community, and does not bring about civic betterments or social improvements as described in Treas. Reg. Section 1.501(c)(4)-1{a)(2)(i).

As explained in Rev. Rul. 73-306 and in Lake Forest Inc., the principle of social welfare under IRC Section 501(c}4) dictates that any service or program provided by an organization, that is or is to be classified as exempt under Section 501(c)(4), must aim its programs at benefiting its community as whole, instead of catering to a select group of individuals who reside within the community. When we apply that principle to you, we find that you are like the organization referenced in Rev. Rul. 73-349, in that your programs are not structured to predominantly serve the common good and overall welfare of your community in accordance with Section 501(c)(4), and instead are structured to solely benefit the members of D at E. Your primary activities are providing meals and care packages to D members, a limited group of individuals at E who are your members’ children. You do not provide these benefits to the public at large, or any individuals outside of D. You also improve the D facilities, where these members reside at E. While the general public may access these facilities and may utilize these facilities, this public use, if any, is infrequent and insubstantial compared to the use by D members. Any benefits conferred to the general public by your activities is insubstantial and not your primary focus. By primarily benefiting D members, the children of your members, you are not serving the common good and overall welfare of the community.

Conclusion

You do not qualify under IRC Section 501(c)(4) because your activities primarily serve the private interests of members of D, and any benefit to the community at large is secondary to the benefits conferred to the D members. Therefore, you do not qualify for exemption under Section 501(c)(4).

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

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

4

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.

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