- 7 - Section 1.501(c)(3)-1(d)(3), Income Tax Regs., expressly includes museums within the scope of section 501(c)(3). Museums, of course, must also satisfy all other requirements of section 501(c)(3) to qualify for exemption. In her final adverse ruling, respondent provided the following explanation for denying petitioner’s application for exempt status: This ruling is made for the following reasons. You are not operated exclusively for exempt purposes. Your operation results in substantial private benefit to Bob Jones University, which is not exempt from income tax under � 501(c)(3) of the Code because of its racially discriminatory policies. Your earnings inure to private shareholders or individuals. Furthermore, you are operated for a substantial non-exempt purpose. This explanation appears to set forth four separate justifications for denying petitioner’s application for exemption. In substance, however, it sets forth a single justification. Respondent contends that the University derives an impermissible benefit from petitioner’s operation and that petitioner, by providing such benefit, furthers a substantial nonexempt purpose. Respondent argues that the University receives an impermissible benefit based on: (1) Petitioner’s payment of rent to the University; (2) petitioner’s payment of salaries to employees formerly employed by the University; (3) petitioner’s exhibition of artwork on loan from the University; (4) the University’s influence on petitioner’s board; (5) petitioner's location on the campus of the University; and (6) the reputational benefit that the University will derive fromPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011