This membership organization, according to its articles of incorporation, has an "all-ages, skills-sharing program." Its mission is "to create [a] caring community, value every individual equally, and share our time, our services and community."
During the membership application process, individuals are asked to indicate five services they would be willing to provide to existing members as well as five services they wish to receive from the membership. An individual coordinates these service-providing opportunities. Services, which are provided on a volunteer basis, include transportation, home repair, raking, snow shoveling, tutoring, massage, data entry, cooking, painting, and computer assistance. Pursuant to a "time-sharing program," one hour of exchange service performed equals one hour of exchange service to be received.
The IRS held that this organization is a "bartering exchange that coordinates the bartering services of [its] membership." This was seen as an operation "for the private benefits of [its] members only." Any community services that this organization may provide are "insubstantial and secondary." This organization was also held to fail the organizational test by reason of its statement of purposes (and a defective dissolution clause) The IRS further reminded this entity that the fair market value of services received in exchange for services provided is income to the members. [20 11(a)]
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