Gerald L. and Joy M. Zeidler - Page 9

                                        - 9 -                                         

          section 501(c)(3).4  Respondent, therefore, is sustained on this            
          issue.                                                                      
               Petitioners claimed on their Federal income tax returns, as            
          Schedule A, Itemized Deductions, educational expenses of $6,077,            
          $12,436, and $4,855, respectively, for 1990, 1991, and 1992,                
          prior to deduction of the 2-percent floor on miscellaneous                  
          itemized deductions under section 67(a).  These expenses were               
          incurred by Mrs. Zeidler as a student pursuing weekend college              
          courses at Alverno College, a women's liberal arts college at               
          Milwaukee, Wisconsin.  In the notices of deficiency, respondent             
          disallowed the amounts claimed on the ground that the educational           
          expenses qualified Mrs. Zeidler for a new trade or business, and,           
          therefore, the expenses were not deductible under section 1.162-            
          5(b)(3), Income Tax Regs.                                                   


          4                                                                           
               Petitioners contend that the organization was not required             
          to apply for recognition of sec. 501(c)(3) status because the               
          gross receipts of the organization for each of its taxable years            
          never exceeded $5,000 per year.  Sec. 508(a) provides generally             
          that any organization organized after Oct. 9, 1969, shall not be            
          treated as an organization described in sec. 501(c)(3), unless              
          the organization has given notice to the Secretary that it is               
          applying for recognition.  Sec. 508(c)(3) exempts from this                 
          notice requirement any organization that is not a private                   
          foundation, and the gross receipts of which in each taxable year            
          are normally not more than $5,000.  The mere fact that the                  
          Cantare Chorale singers was not required to give notice that it             
          was applying for recognition as a tax-exempt organization does              
          not, in and of itself, establish that the organization was                  
          organized and operated exclusively for a charitable purpose,                
          unless the organization, in fact, establishes that it was so                
          organized and operated exclusively for an exempt purpose.  Sec.             
          1.501(c)(3)-1(b), Income Tax Regs.                                          




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011