Personal and pivotal perspectives on timely topics, written by our professionals.
By Laurie Smith
In a recent ruling by the IRS (issued in a private letter), it was concluded that a pet therapy program implemented by a charitable organization furthered their charitable purposes under Section 501(c)(3). Section 501(c)(3) allows for federal tax exemption of nonprofit organizations, specifically those that are considered public charities, private foundations, or private operating foundations.
Pet therapy has been in the news for its positive effects on hospital patients, the elderly community, and those dealing with both physical and mental illnesses. Some benefits of pet therapy include lower blood pressure, a decline in depression, added comfort, decreased anxiety, and increased self-confidence. Airlines now allow registered service dogs on certain flights to calm passengers’ anxieties and fears.
Taking these benefits into consideration, the IRS looked at the charitable organization which conducts oncology research and education on the development, diagnosis, treatment, and prevention of malignant tumors in humans and animals, and determined that it should be recognized as a Section 501(c)(3) charitable organization. Additionally, the charitable organization proposed instituting a new pet therapy program which would bring health certified, registered therapy dogs to hospital patients, particularly children and elderly nursing home residents. The program is aimed at providing a positive therapeutic benefit to the individuals involved.
The IRS ruled that the organization’s pet therapy services are a continuance of its tax exempt purposes under Section 501(c)(3). The IRS also noted that by aiming to improve individuals’ mental well-being, the program furthers the organization’s charitable purposes.
This ruling indicates the IRS’ willingness to view innovative activities as furthering charitable organization purposes. It will be interesting to see how the IRS will adapt to innovative ideas and their effect on the tax law in future rulings.