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profit-maximizing incentive; and the market advantages and
competitive benefits secured by the SCA affiliates as the result
of this arrangement with petitioner. Taken in their totality,
these factors compel the conclusion that by ceding effective
control over its operations to for-profit parties, petitioner
impermissibly serves private interests.
IV. Petitioner’s Claim to Exemption Under
the Integral Part Doctrine
Petitioner argues that even if it does not qualify for tax
exemption on a “stand alone” basis, it qualifies for exemption
under the integral part doctrine.
The integral part doctrine is not codified, but rather is
the outgrowth of judicial opinions, rulings, and regulations.
The precise contours of this doctrine are not clearly defined.
The seminal case of Squire v. Students Book Corp., 191 F.2d 1018
(9th Cir. 1951), held that an organization that operated a
bookstore on the premises of a college for the accommodation of
students and faculty was exempt because it bore a “close and
intimate relationship” to the functioning of the college itself.
See also Brundage v. Commissioner, 54 T.C. 1468 (1970); Estate of
Thayer v. Commissioner, 24 T.C. 384 (1955).
Shortly after the decision in Squire, Treasury regulations
acknowledged the existence of the integral part doctrine in
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