At Cost Services, Inc. - Page 2




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          section 501(c)(3).  The issue for decision is whether petitioner            
          operates exclusively for charitable purposes.  Unless otherwise             
          indicated, all section references are to the Internal Revenue               
          Code in effect at the time the petition was filed, and all Rule             
          references are to the Tax Court Rules of Practice and Procedure.            
                                     Background                                       
               The administrative record, which includes all of the facts             
          upon which the Commissioner made the final adverse determination,           
          was submitted to the Court under Rule 217(b)(1) and is                      
          incorporated herein by this reference.                                      
               Petitioner is a nonprofit Delaware corporation with its                
          principal office located in New York, New York.  The sole                   
          founder, director, and officer of petitioner is Matthew Marion              
          Fondel (Fondel), who has a bachelor’s degree in electrical                  
          engineering from Northwestern University.  Before founding                  
          petitioner, Fondel worked temporary service jobs for 4 years                
          through a number of temporary service agencies.                             
               On Form 1023, Application for Recognition of Exemption Under           
          Section 501(c)(3) of the Internal Revenue Code, petitioner stated           
          that its principal purposes are to:                                         
               (a) eliminate poverty for inner city minorities                        
               associated with long-term unemployment and under-                      
               employment and combat the racial prejudice these                       
               individuals face in the conventional work place;                       
               (b)  promote social welfare by providing a means of                    
               obtaining a lawful income to inner city minorities                     





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Last modified: May 25, 2011