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(2) Whether any of the following constituted an
inurement of petitioner’s net earnings to an insider--
(a) diversions of bingo game proceeds,
(b) amounts paid to attorneys Climaco and Zerbini,
(c) a $2,500 check payable to the order of Ohio
Boys Town, and
(d) rental fees paid in connection with
petitioner’s bingo games in the Center.
A. Zeve, Popovic, or Vecchio as an Insider
In order for an organization to qualify for exemption under
section 501(c)(3), no part of the organization’s net earnings may
inure to the benefit of any private shareholder or individual.
Sec. 501(c)(3).
A “private shareholder or individual” is broadly defined as
any person having a personal and private interest in the
activities of the organization. Sec. 1.501(a)-1(c), Income Tax
Regs. Such private shareholders or individuals are sometimes
referred to for convenience as “insiders”. See American Campaign
Academy v. Commissioner, 92 T. C. at 1066; Sound Health
Association v. Commissioner, 71 T.C. 158, 185-186 (1978).
On opening brief respondent contends that Zeve, Popovic, and
Vecchio were insiders with respect to petitioner. However, on
answering brief respondent refers only to Zeve and Popovic.
Petitioner contends that Zeve, Popovic, and Vecchio are not
insiders with respect to petitioner.
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