Share Network Foundation - Page 2




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          section references are to the applicable versions of the Internal           
          Revenue Code.  Rule references are to the Tax Court Rules of                
          Practice and Procedure.                                                     
                                     Background                                       
               We decide this case on the basis of the entire                         
          administrative record, see Rule 217(b)(1), which is incorporated            
          herein by this reference.  Petitioner's mailing address was in              
          Ontario, California, when its petition was filed.                           
               William J. Tully is a promoter of tax-exempt entities.  Karl           
          H. Goesele attended a seminar presented by Mr. Tully, and Mr.               
          Goesele retained Mr. Tully to organize a tax-exempt foundation              
          for Mr. Goesele.  Mr. Tully organized a corporation named "Share            
          Network Foundation" (petitioner herein). Petitioner's officers              
          are Mr. Tully (vice president), Mr. Goesele (president and                  
          treasurer), Michael D. Tate (vice president), Sylvia A. Goesele             
          (secretary), and Ven. N. Kunga Gyaltsen (secretary).  Karl H.               
          Goesele is Sylvia A. Goesele's father, and Ms. Goesele is Mr.               
          Tate's wife.  Messrs. Goesele, Tate, and Tully serve as directors           
          on petitioner's board.                                                      
               Mr. Tully filed articles of incorporation for petitioner               
          with the Nevada secretary of state, and he prepared bylaws for              
          petitioner.  The articles state that petitioner's primary purpose           
          is "TO PROVIDE AND MAINTAIN A PHYSICAL FACILITY FOR SPIRITAL                
          [sic] WORSHIP."  The bylaws state that petitioner's primary                 





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