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beano account could not exceed the lesser of $50,000 or the
amount of net proceeds reported on the organization's annual
report most recently filed annual report. Respondent argues that
the Texas Act is distinguishable in that section 11(d) of the Act
does not require that net proceeds be devoted to charitable
purposes within a particular taxable year.
In our view, respondent is attempting to narrow the holding
of South End Italian Independent Club, Inc. v. Commissioner,
supra. Respondent relies on a temporal constraint that is not
expressed in the Court's opinion. Further, we do not infer from
the Court's opinion that such a requirement was necessarily
contemplated. See supra note 9.
In addition, it is clear WSA risked losing its bingo license
if it used any part of its net bingo proceeds, above or below the
minimum amount, for other than charitable purposes. Respondent
contends that an organization's license will not be suspended if
the organization makes the minimum charitable disbursements.
However, an organization must also comply with section 11(d) of
the Act which requires that net proceeds from bingo be devoted to
charitable purposes. If the agency responsible for regulating
bingo finds that an organization has disbursed funds for a
purpose other than for payment of expenses allowed under the Act
or for charitable purposes, the agency will issue a "show
compliance letter." Administrative actions thereafter may lead
to revocation or suspension of such organization's license.
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