-25-
812(d)), while the term “private shareholder or individual”
appears in paragraph (4) of the same section 2055(a). We have
not found any explanation of the intended difference between
“stockholder” and “shareholder”, nor any reason why “stockholder”
was replaced by “shareholder” in the Revenue Act of 1924. See
Western Natl. Mut. Ins. Co. v. Commissioner, 102 T.C. 338, 354
(1994), affd. 65 F.3d 90 (8th Cir. 1995).
Section 1.501(a)-1(c), Income Tax Regs., provides as
follows:
(c) “Private shareholder or individual” defined. The
words “private shareholder or individual” in section 501
refer to persons having a personal and private interest in
the activities of the organization.
This definition is unchanged from Regs. 65, art. 517 (1924),
except that the older regulations use “individuals” and
“corporation”, instead of “persons” and “organization”,
respectively. Art. 517 of Regs. 65 is essentially similar to
Regs. 45, art. 517 (1920). In general, the case law appears to
have drawn a line between those who have significant control over
the organization’s activities and those who are unrelated third
parties. United Cancer Council, Inc. v. Commissioner, 109 T.C.
__, __ (1997) (slip op. at 91); People of God Community v.
Commissioner, 75 T.C. 127, 133 (1980).
(1) Zeve
Zeve, a former president of petitioner, was petitioner’s
treasurer during the years in issue. As treasurer, he was a
Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 NextLast modified: May 25, 2011