Rev. Rul. 66-221

Advice has been requested whether an organization, operated as described below, qualifies for exemption from Federal income tax under section 501(c)(4) of the Internal Revenue Code of 1954.

The organization was created for the purpose of operating emergency firefighting facilities on a volunteer basis for the protection of life and property within the community. In addition to the time spent in firefighting, the volunteers regularly attend training sessions in firefighting and emergency rescue work. They are on call 24 hours a day. Time also is spent in keeping firefighting apparatus in good condition for use when needed, maintaining the firehouse building, and attending an annual firemen's convention. Volunteers are called upon to give safety lectures and demonstrations before schools and civic groups. Since many of these activities are conducted without incurring any expense or receiving any remuneration, they are not reflected in the financial statements of the organization.

Membership in the organization is open to all adults living in the community. Although members pay dues and the community contributes funds to pay the salary of one firetruck driver, the principal source of the organization's income is from the operation of its social facilities for members and from the conduct of public weekly dances by unpaid volunteers drawn from the membership. Except for amounts paid for entertainers, the proceeds from these dances are used to provide fire protection services and facilities to the community. The organization would be unable to supply these services and facilities solely from contributed funds and membership dues.

Section 501(c)(4) of the Code provides for the exemption of civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare.

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 is not operated primarily for the promotion of social welfare if its primary activity is operating a social club for the benefit, pleasure, or recreation of its members, or is carrying on a business with the general public in a manner similar to organizations which are operated for profit. See section 1.501(c)(4)-1 of the Income Tax Regulations. Generally, nonprofit volunteer fire companies engaged in fighting fires and related activities promote the common good and general welfare of the people of the community as a whole.

A necessary incident to the operation of volunteer firefighting equipment is bringing together people interested in firefighting and binding them together in a working unit. This objective is frequently achieved by providing recreational and special facilities for the members of the organization and their guests. The fact that the organization's principal source of revenue is from its social activities is not determinative of whether the organization is primarily engaged in social welfare.

Based upon the foregoing circumstances, it is concluded that the organization is primarily engaged in activities which benefit the community as a whole. Its social activities are incidental to, and in furtherance of, its primary objective of operating a volunteer fire department. Accordingly, the organization is exempt from Federal income tax as a civic or social welfare organization described in section 501(c)(4) of the Code.

An organization which considers itself within the scope of this Revenue Ruling must, in order to establish exemption under section 501(c)(4) of the Code, file an application on Form 1024, with the District Director of Internal Revenue for the internal revenue district in which is located the principal place of business or principal office of the organization. See section 1.501(a)-1 of the regulations.