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also receive 10 percent of the gross profit from the sale of the
newsletter.
Financial information included in petitioner’s application
for exempt status shows that it had occupancy expenses in 1994 of
$6,240 and itemized expenses of $2,230. The occupancy expenses
were for an apartment that served as the office of petitioner,
the office of the LLC, and the personal living quarters of
Fondel. Petitioner intends to obtain a building, either by lease
or gift, where it can perform job training and job placement
services in one location.
On April 4, 1995, petitioner submitted its Form 1023,
Application for Recognition of Exemption Under Section 501(c)(3)
of the Internal Revenue Code. Respondent issued an initial
adverse determination on October 23, 1995. Petitioner appealed
to the Internal Revenue Service Office of Appeals, which gave a
final adverse determination on April 17, 1996, denying tax-exempt
status to petitioner under section 501(c)(3). The Commissioner’s
reasons for denial stemmed from the determination that operations
of petitioner serve the private interests of Fondel, petitioner
is operated for private benefit rather than exclusively for
public purposes, and petitioner has failed to establish that it
is operated exclusively for exempt purposes. Petitioner
challenges that determination in this action for declaratory
judgment.
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