Anclote Psychiatric Center, Inc. - Page 4

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            Florida against the board of directors.  Thereafter, the attorney                           
            general for the State of Florida sued the same board of directors                           
            on the theory that petitioner sold its assets to its board                                  
            members for less than fair market value and, therefore, violated                            
            a Florida statute designed to prevent the improper use of any                               
            nonprofit corporation.  The State and Federal court proceedings                             
            generated a vast amount of media coverage and publicity, and as a                           
            direct result thereof, a revenue agent employed in the exempt                               
            organization division of the IRS initiated an examination of                                
            petitioner in 1987.  During this examination, respondent raised                             
            the issues of whether petitioner could continue to rely on the                              
            1982 ruling letter and whether petitioner's tax-exempt status                               
            should be revoked.                                                                          
                  In a technical advice memorandum, issued to petitioner on                             
            April 29, 1991, the National Office determined that petitioner                              
            did not receive fair market value for the sale of its hospital                              
            facility and proposed to revoke its tax-exempt status.                                      
            Respondent later issued a final adverse determination letter on                             
            December 12, 1991, revoking petitioner's status as an                                       
            organization described in section 501(c)(3) effective for all                               
            years beginning on and after October 1, 1982.  Simultaneously                               
            with the formal notice of revocation, respondent issued a notice                            
            of deficiency to petitioner for the taxable periods ending                                  
            September 30, 1984 through September 30, 1988.  Respondent made                             
            no determination with respect to petitioner's 1983 taxable year                             




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