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Two recent private letter rulings highlight the need to carefully consider an organization’s stated purposes and the provision under Code Section 501(c) that best fits those purposes before applying for exempt status.
In Private Letter Ruling 202102013, the IRS denied exempt status under Code Section 501(c)(3) for an organization whose stated purposes were to promote recreation and preserve/restore historic cars.  The organization’s articles of incorporation also included a clause that stated that notwithstanding any other provision, the organization would not carry on any other activities not permitted to be carried on by a corporation exempt under Code Section 501(c)(3).   The IRS pointed out that the specific stated purposes of recreation and preserving/restoring historic cars was broader than the purposes specified in Code Section 501(c)(3), and that the notwithstanding clause included in the organizational document could not cure the non-exempt statement of purpose.

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