- 5 - of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation * * *, and which does not participate in, or intervene in * * *, any political campaign on behalf of any candidate for public office. The theory behind the exemption is that the Government is compensated for the loss of revenue by its relief from the financial burden that would otherwise have to be met from public funds and that the Government realizes benefits resulting from private promotion of the general welfare. See H. Rept. 1860, 75th Cong., 3d Sess. (1938), 1939-1 C.B. (Part 2) 728, 742. Section 501(c)(3) sets forth three requirements for an organization to be exempt: (1) The corporation must be organized and operated exclusively for exempt purposes, (2) no part of the net earnings of the corporation may inure to the benefit of any shareholder or individual, and (3) the corporation must not engage in political campaigns or, to a substantial extent, in lobbying activities. See Hutchinson Baseball Enters., Inc. v. Commissioner, 73 T.C. 144, 151 (1979), affd. 696 F.2d 757 (10th Cir. 1982). Only the first requirement is at issue in this case. Respondent concedes that petitioner is organized exclusively for exempt purposes within the meaning of section 501(c)(3). Therefore, the only remaining question is whether petitioner isPage: Previous 1 2 3 4 5 6 7 8 9 Next
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