- 9 -
Petitioner stresses that the board of directors, independent
of Hurd and Gould, controls the distribution of proceeds raised
by the sale of the lottery tickets. While the board does decide
which charities will receive funds, it is clear from the record
that Kristine Hurd and James Gould control sales of the lottery
tickets as they relate to KJ's Place. It is also clear that
their control is realistically independent of the board. In a
protest letter to the IRS dated July 18, 1994, petitioner
concedes that the officers of KJ's Place appear able to control
petitioner but defend it as necessary.
It is our opinion, however, that KJ's Fundraisers, Inc.
would fold without the original founders of the organization
as officers and local charities would go unfunded. * * *
[Emphasis added.]
Before July 1, 1994, Hurd and Gould received wages and KJ's
Place received rent from petitioner. Although those practices
ceased and are not in issue here, the current board of directors
is composed of at least the majority of the same members who
allowed those amounts to be paid. This strongly suggests that
Hurd and Gould are free to set policy for their own benefit
without objection from the board. Nothing in the record since
July 1, 1994, indicates otherwise.
Petitioner also contends that KJ's Place actually lost
money, since patrons preferred to buy lottery tickets rather than
use their money to purchase beverages. Thus, petitioner argues,
there was no actual benefit. While all facts must be accepted as
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011