Milk Saving Starving Children Foundation, T.C. Memo. 2026-1, filed 1/6/26, leads off the Memo season with a revocation of its 501(c)(3) status. MSSC was organized to “raise money to purchase rice, soy, and/or powdered milk. It will solicit these products from their manufacturers. The milk will then be distributed world-wide to starving children.” T. C. Memo. 2026-1, at p. 3.

Problem was, as STJ Diana L. (“Sidewalks of New York”) Leyden found, “… while petitioner may have donated and participated in some charitable endeavors, it was not operated exclusively for exempt purposes. In addition to any charitable activities it undertook, petitioner engaged extensively, and seemingly primarily, in commercial activities, namely (1) purchasing and renovating the Property [a building MSSC bought], as well as renting out the addition to that Property to unrelated commercial businesses, and (2) using the Property to operate a coffee shop, Café Beignet.” T. C. Memo. 2026-1, at p. 14.

Although MSSC at first did some charitable milk distribution, it stopped ten (count ’em, ten) years after organization, and didn’t restart until IRS started auditing, T. C. Memo. 2026-1, at pp. 4-5.

And MSSC ran a golf fundraiser, but what happened to the funds is not explained in the administrative record, T. C. Memo. 2026-1, at p.12.

MSSC was not operated exclusively for an exempt purpose.

“In this regard the presence of a single substantial purpose that is not described in section 501(c)(3) precludes exemption from tax under section 501(a) regardless of the number or the importance of the purposes that are present and described in section 501(c)(3).” T. C. Memo. 2026-1, at p. 12.

Opening the T. C. Sum. Op. book for 2026, Luke Gibson and Breeana Gibson, T. C. Sum. Op. 2026-1, filed 1/6/26, save $5700 of their noncash charitables, but lose the remaining “high end cycling EQ apparel” to a defective appraisal and Luke’s trial testimony, both of which fail to convince STJ Di. In short, keep track of your basis and appraisals, and the deductions will keep track of themselves.