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Nonprofit Law/Discriminatory Practice by 501 (c) (3)

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Question
I am currently a member of the military and my family recently ran into an issue with a 501 (c) (3) Animal Rescue Company.  Essentially, we had begun to search for a pet dog to adopt and stumbled upon a specific dog rescued by a 501 (c) (3) company.  When we began to fill out the adoption application, the application specifically states that they will not adopt out to Military Families.  Is this legal?  Although military personnel are not a "protected class" it seems discriminatory.  How can our federal government provide them with a tax exemption, yet if you are a member of the Federal Government's military, you cannot adopt from them?

Answer
The IRS has regulations prohibiting 501(c)(3) organization status to schools that discriminate on the basis of race.  As for other forms of discrimination, they would not be allowed if they are found to be against the public interest.

---Start of Excerpt--
Section 501(c)(3) therefore must be analyzed and construed within
the framework of the Internal Revenue Code and against the
background of the congressional purposes. Such an examination
reveals unmistakable evidence that, underlying all relevant parts
of the Code, is the intent that entitlement to tax exemption
depends on meeting certain common-law standards of charity -
namely, that an institution seeking tax-exempt status must serve a
public purpose and not be contrary to established public policy.

This "charitable" concept appears explicitly in 170 of the Code.
That section contains a list of organizations virtually identical
to that contained in 501(c)(3). It is apparent that Congress
intended that list to have the same meaning in both [461 U.S. 574,
587] sections. In 170, Congress used the list of organizations in
defining the term "charitable contributions." On its face,
therefore, 170 reveals that Congress' intention was to provide tax
benefits to organizations serving charitable purposes. The form of
170 simply makes plain what common sense and history tell us: in
enacting both 170 and [461 U.S. 574, 588]   501(c)(3), Congress
sought to provide tax benefits to charitable organizations, to
encourage the development of private institutions that serve a
useful public purpose or supplement or take the place of public
institutions of the same kind.
---End of Excerpt--
http://pages.citebite.com/i5e6s9l9ninh

From the U.S. Supreme Court Case, Bob Jones University v. United
States, 461 U.S. 574 (1983) which decided the 501(c)(3)
organization status may not be granted to racially discriminatory
schools.

The 501(c)(3) organization may consider the welfare of an animal is jeopardized by the family moving around and they may have decided that military families move around a lot.  If you can explain that you are not like that, then possibly they would allow you to adopt.  Otherwise, they may have a valid reason for their policy of not allowing adoptions by military families and that would then mean that their discrimination is not illegal. I  will inform you that you may be discriminated against but most types of discrimination are legal.  For example, federal tax laws
provide for higher tax rates for taxpayers with higher income. Unless the reason for the discrimination is based upon race, nationality, religion, or one of the other few prohibited reasons, an exempt entity may discriminate.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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