Women of the Motion Picture Industry, et al. - Page 4

                                          4                                            
               "Instant bingo" is a game of chance.  A participant places a            
          wager by purchasing a card, the front of which is preprinted with            
          bingo card patterns and is covered with pull-tabs.  The                      
          participant removes the pull-tabs, and if the patterns revealed              
          on the front of the card match the winning patterns preprinted on            
          the back of the card, a prize is payable.  A winning participant             
          collects the prize from a cashier or an usher.                               
               Petitioners each leased premises for the purpose of                     
          conducting bingo and "instant bingo" (sometimes referred                     
          collectively as bingo activities) and carried on these bingo                 
          activities approximately 3 times per week during the years in                
          issue.  Petitioners' bingo activities were not substantially                 
          related to their exempt functions or purposes.                               
               Each petitioner maintained a separate checking account                  
          (referred to as the bingo account) into which the gross proceeds             
          less prizes paid from bingo activities were deposited.  During               
          the years in issue, petitioners made payments to outside                     
          charities from bingo proceeds held in each organization's bingo              
          account.  In addition, FSEP, Schoenstatt, ACADA, and WSA                     
          transferred bingo proceeds from their respective bingo accounts              
          into their respective general operating bank accounts (referred              
          to as general accounts or general funds) for their organizations             
          during the years in issue.  Some of these proceeds were paid to              
          third parties during the taxable years in issue.  During the                 






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