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We find problematic and reject the notion that enhancement
of another entity’s “educational and spiritual reputation” may
preclude exempt status. Respondent has not cited, nor have we
found, any cases supporting her position.
G. Cumulative Effect of These Factors
Ultimately, respondent concedes that “most of the individual
factors * * * may not appear to result in more than incidental
private benefit” but contends that the “cumulative effect” of
these factors creates a private benefit. We disagree. Based on
our review of the record, we conclude that petitioner satisfies
the requirements of section 501(c)(3) in substance as well as in
form. Petitioner is a museum, open to the public free of charge,
that displays what petitioner claims is one of the greatest
collections of religious art in the Western Hemisphere.
Respondent has not challenged this claim. With respect to all
financial dealings between petitioner and the University,
respondent has conceded that petitioner is paying the University
fair market value or less. While there is no doubt that the
University receives certain benefits from petitioner's existence,
these benefits are merely incidental.
III. Conclusion
Respondent’s arguments ultimately lead to the conclusion
that a taxable corporation could never spin off a tax-exempt
organization and conduct subsequent financial dealings with it.
Because funds raised by a tax-exempt organization generally come
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