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petitioner did not qualify under section 501(c)(3) because it
failed the operational test of section 1.501(c)(3)-1(c), Income
Tax Regs. On February 2, 1995, petitioner notified the
Commissioner that it was appealing that determination, and
approximately 6 months after that, Mr. Tully met with one of the
Commissioner's Appeals officers to discuss petitioner's case. On
or about August 10, 1995, petitioner filed with the Commissioner
a second Form 1023. Petitioner's second Form 1023 stated that
the primary purpose of the foundation, as stated in its
oroginal [sic] application for exemption, * * * [was]
amended to read as follows:
"The primary purpose of the foundation will be to
raise funds for financially strap [sic] families living
within the immediate area of the foundation's base of
operation with all funds being administered by other
IRS approved 501(c)(3) charitable organizations such as
the Salvation Army, United Way and the Catholic
Church".
* * * the foundation will limit its currect [sic] fund
raising activities to raising funds directly from its
officers, directors and their immediate familites
[sic], friends and business associates.
The second Form 1023 did not list specifics as to petitioner's
operations, including the manner in which petitioner would effect
its primary purpose. The second Form 1023 did not address any
safeguards against private inurement.
On April 9, 1996, the Commissioner mailed a letter to
Mr. Tully, in his capacity as vice president of petitioner,
explaining that petitioner had not yet described its operations
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