July 22, 2010; Source: WebCPA.com | Though maybe a frequent side effect of certain charitable professions, narcissism, according to the IRS is not, on its own, a reason for being granted charitable status. William C. Naylor, an engineer and inventor in Spokane, Wash. established an institution named the Free Fertility Foundation to—what else?—distribute his own sperm to deserving women.
But before you get too excited, girls, be advised that careful screening by Naylor, who uses a ranking system devised by him and his father, is required before you are allowed to incubate a Naylor. Out of more than 800 women who have applied, only 24 sperm donations were awarded and this is, in fact, the leg the IRS stood on in refusing Naylor status. After being rejected by the IRS, Naylor took his case to the Tax Court but found no joy there.
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Says the court in agreeing with the IRS, “The free provision of sperm may, under appropriate circumstances, be a charitable activity . . . Petitioner, however, does not qualify for tax exemption because the class of petitioner’s beneficiaries is not sufficiently large to benefit the community as a whole.”
“While Naylor may believe that petitioner’s activities ‘make more of a positive difference to the world than all of the inventions and scientific discoveries that * * * [he] could ever create,’ we are not convinced that the distribution of one man’s (i.e., Naylor’s) sperm to a small number of women, selected in the manner presented, promotes health or confers a public benefit . . . Accordingly, we find that petitioner is not operated exclusively for exempt purposes and therefore does not qualify for tax exemption pursuant to section 501(c)(3).”—Ruth McCambridge