Case: IRS Correctly Revoked Tax-Exempt Status of Religious Group

The U.S. Court of Federal Claims held that the IRS correctly revoked a religious group’s tax-exempt status under IRC §501(c)(3), granting summary judgment for the government. Taxpayer, a religious organization, received over $1 million in donations during 2013-2016 and disbursed nearly all of it to members of a particular family, who controlled the religious organization. The court found that at least some of the taxpayer’s net earnings inured to the private benefit of its members, violating §501(c)(3) requirements. The court held that the taxpayer’s lack of financial controls, documentation, and oversight, combined with the family’s complete control over disbursements, supported ...