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Sec. 1.501(c)(3)-1(d)(1)(ii), Income Tax Regs. To meet this
requirement, the organization must demonstrate
that it is not * * * operated for the benefit of private
interests such as designated individuals, the creator or his
family, shareholders of the organization, or persons
controlled, directly or indirectly, by such private
interests.
Id.
Under the operational test, the organization's purpose,
rather than the nature of its activities, determines whether the
organization is entitled to tax-exempt status. B.S.W. Group,
Inc. v. Commissioner, 70 T.C. 352, 356-357 (1978). Even an
organization engaged in only one activity may have multiple
purposes for that activity. Copyright Clearance Center, Inc. v.
Commissioner, 79 T.C. 793, 803 (1982). A single nonexempt
purpose, if substantial in nature, will disqualify an
organization from qualification under section 501(c)(3). Better
Business Bureau v. United States, 326 U.S. 279, 283 (1945).
Determining the purpose of the organization is a factual question
which concerns "both the actual as well as the stated purposes
for the existence of the organization and the activities it
engages in to accomplish those purposes." Christian Manner
International, Inc. v. Commissioner, 71 T.C. 661, 668 (1979).
Petitioner's case is factually similar to P.L.L. Scholarship
Fund v. Commissioner, 82 T.C. 196 (1984). In that case, the
taxpayer was a nonprofit corporation formed to raise money for
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