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including the supporting of Ohio Boys Town and other charities
which deal primarily with underprivileged children. As of the
time of the trial in the instant case, Ohio Boys Town was an
organization which respondent determined was exempt under section
501(c)(3).
Petitioner applied for a favorable charitable exemption
ruling by an application dated January 27, 1971. In this
application petitioner represented that no part of its net income
would inure to the benefit of any private shareholder or
individual. To this application petitioner attached a copy of
its articles of incorporation, which provide in pertinent part as
follows:
THIRD: This Corporation [petitioner] is organized
exclusively for charitable, religious, educational and
scientific purposes, including, for such purposes, the
making of distributions to organizations that qualify as
exempt organizations under Section 501(c)(3) of the Internal
Revenue Code of 1954 as amended.
* * * * * * *
FIFTH: No part of the net earning of the Corporation
shall inure to the benefit of, or be distributable to its
members, trustees, officers, or other private persons,
except that the Corporation shall be authorized and
empowered to pay reasonable compensation for services
rendered and to make payments and distributions in
furtherance of the purposes set forth in Article THIRD
hereof.
Petitioner’s articles of incorporation also provide as
follows with regard to petitioner’s indemnifying its officials
for legal expenses:
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