Are free fertility services a non-profit activity?

Let’s start off this Monday with something light. An individual founded a California nonprofit public benefit corporation to provide his sperm free of charge to women seeking to become pregnant through artificial insemination or in vitro fertilization. His website chronicles his life from infancy to adulthood, with photos, family history, and achievements (e.g., elementary school spelling bee and junior high school science fair competition).] While recognizing that the "free provision of sperm may, under appropriate circumstances, be a charitable activity," the Tax Court was "not convinced that the distribution of one man's . . . sperm to a small number of women, selected in the manner presented, promotes health or confers a public benefit." The court held that the organization was not operated exclusively for exempt purposes and therefore did not qualify for exempt status under IRC Sec. 501(c)(3). Free Fertility Foundation, 135 TC No. 2 (Tax Ct.).

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.