- 4 - directors and the owners of KJ's Place, and petitioner's books are kept separate from the accounts of KJ's Place. From the proceeds of the sales of the lottery tickets, petitioner has made grants to a variety of organizations. Some of these grants have been memorialized in local newspapers. Of six clippings sent to the IRS by petitioner, two have a photo of Hurd or Gould in front of KJ's Place handing out a check on behalf of petitioner. One clipping notes that KJ's Fund Raisers is a new corporation located at KJ's Place. Another shows a director of petitioner presenting a check and identifies the proceeds as arising from rip-ticket sales at KJ's Place. In its preliminary adverse determination letter, issued on June 7, 1994, the IRS indicated that the identity of the lounge owners and the officers of petitioner put Hurd and Gould in a position to control petitioner. Petitioner responded as follows: With respect to control of the organizations, it may appear that all of KJ's Fundraisers, Inc., fundraising activities can be controlled by the owners of the lounge due to the relationship between officers and directors of each. It is our opinion, however, that KJ's Fund Raisers, Inc. would fold without the original founders of the organization as officers and local charities would go unfunded. Therefore we do not view the appointment of the present officers as a function of control but more as a function of going concern. The IRS issued its final adverse determination letter on February 27, 1996. It stated: You have failed to establish that you are operated exclusively for exempt purposes under sectionPage: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011