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accomplishes an exempt purpose. See Federation Pharmacy Servs.,
Inc. v. Commissioner, 72 T.C. 687, 691 (1979), affd. 625 F.2d 804
(8th Cir. 1980); est of Hawaii v. Commissioner, 71 T.C. 1067,
1079 (1979), affd. without published opinion 647 F.2d 170 (9th
Cir. 1981); secs. 1.501(c)(3)-1(c)(1) and 1.501(c)(3)-1(e)(1),
Income Tax Regs.
Whether an organization has a substantial nonexempt purpose
is a question of fact to be resolved on the basis of all the
evidence presented by the administrative record. See B.S.W.
Group, Inc. v. Commissioner, 70 T.C. 352, 357 (1978); see also
Church by Mail, Inc. v. Commissioner, 765 F.2d 1387, 1390 (9th
Cir. 1985), affg. T.C. Memo. 1984-349; est of Hawaii v.
Commissioner, supra at 1079. “Factors such as the particular
manner in which an organization’s activities are conducted, the
commercial hue of those activities, and the existence and amount
of annual or accumulated profits are relevant evidence of a
forbidden predominant purpose.” B.S.W. Group, Inc. v.
Commissioner, supra at 358.
The burden of proof is on petitioner to demonstrate, based
on materials in the administrative record, that it is operated
exclusively for exempt purposes and that it does not benefit
private interests more than incidentally. See Rule 217(c)(2)(A);
Church of Scientology v. Commissioner, 823 F.2d at 1317; Florida
Hosp. Trust Fund v. Commissioner, 103 T.C. 140, 146 (1994), affd.
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