(CN) – A California nonprofit that donates free sperm is not exempt from paying federal income tax, the U.S. Tax Court ruled, because it’s too selective about the women who receive its founder’s sperm.
The Free Fertility Foundation provides founder William Naylor’s sperm free to women trying to become pregnant.
Naylor, a software engineer and inventor, has said that “being a sperm donor … makes more of a positive difference to the world than all of the inventions and scientific discoveries that I could ever create.”
He and his father select the women who receive sperm based on their responses to a questionnaire. Preference is given to women “with better education” and no record of divorce, domestic violence or “difficult fertility histories,” and to those who are under 37, ethnic minorities and “in a traditional marriage situation,” among other factors.
In 2004 and 2005, the foundation received 819 applications and distributed sperm to only 24 women.
It applied for tax-exempt status, claiming it serves a public interest by providing a free health service.
When his petition was denied, Naylor appealed to the federal tax court, which agreed that the foundation is not entitled to a tax break.
“The free provision of sperm may, under appropriate circumstances, be a charitable activity,” Judge Maurice Foley wrote. But he said the foundation “does not qualify for tax exemption because the class of [its] beneficiaries is not sufficiently large to benefit the community as a whole.”
Though Naylor insisted his beneficiaries consisted of “all women of child-bearing age,” the court said this was not the case.
“To the contrary, the class of potential beneficiaries includes only the limited number of women who are interested in having one man — Naylor — be the biological father of their children and who survive the very subjective, and possibly arbitrary, selection process controlled by the Naylors,” Foley concluded.