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convenience, we shall refer to section 501(c)(3), but our
analysis and conclusions, in the context of the instant case,
will apply equally to section 170(c)(2).
In the instant case, respondent contends only that (1)
petitioner was not operated exclusively for exempt purposes
because its “activities served private commercial purposes;” (2)
petitioner “operated in large part for the private benefit of
W&H;” and (3) petitioner’s net earnings inured to the benefit of
private shareholders or individuals. Respondent does not contend
that petitioner is an “action” organization (sec. 1.501(c)(3)-
1(c)(3), Income Tax Regs.), has not raised any contention that
petitioner has failed to satisfy any of the other requirements
discussed above for exemption under section 501(c)(3), and does
not dispute petitioner’s organization exclusively for exempt
purposes. Respondent further acknowledges that respondent bears
the burden of proof in establishing inurement, because
respondent’s notice of revocation did not indicate that inurement
was a ground for the revocation. Rule 217(c)(2)(B); Dumaine
Farms v. Commissioner, 73 T.C. 650, 659-660 (1980).
We note that while the inurement prohibition and the private
benefit analysis under the operational test of the Treasury
regulations may substantially overlap, the two are distinct
requirements which must independently be satisfied. American
Campaign Academy v. Commissioner, 92 T.C. at 1068-1069. However,
it is not clear that the first two of respondent’s contentions--
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