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established a research program to study health care delivery
systems, conducted a health education program open to the general
public, and was governed by a board of directors the majority of
whom were elected by Sound Health Association members from the
community at large. Sound Health Association v. Commissioner,
supra at 184.
We found that Sound Health Association provided community
benefits beyond those offered by the hospital deemed exempt in
Rev. Rul. 69-545, supra. Specifically, Sound Health Association
adopted a plan to accept contributions for the purpose of
subsidizing membership for those who could not otherwise afford
to pay the full amount of monthly dues. Further, Sound Health
Association’s practice of offering membership to the public at
large demonstrated that the class of persons eligible to benefit
from the organization’s activities was practically unlimited.
Sound Health Association v. Commissioner, supra at 184-185.
We rejected the Commissioner’s argument that Sound Health
Association provided an unwarranted private benefit to its
members. We reasoned that, like the hospital deemed exempt in
Rev. Rul. 69-545, supra, which (except in emergency cases)
limited its treatment to paying patients, Sound Health
Association was permitted to restrict its services to paying
members. Sound Health Association v. Commissioner, supra at 186-
187.
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