At Cost Services, Inc. - Page 10

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               compensation payments have exceeded $13 billion in each                
               of the last seven years, and in 1993--even as recovery                 
               set in--states paid out nearly $22 billion in regular                  
               unemployment benefits.  Federal spending on                            
               administrative costs for regular unemployment insurance                
               totalled $2.5 billion last year.  But unemployment                     
               insurance is not designed to help speed workers into                   
               reemployment.  So despite these huge outlays, the                      
               predicament of the long-term unemployed led to the                     
               repeated provisions of federal Emergency Unemployment                  
               Compensation payments, costing $24 billion over the                    
               past two years.  [Reemployment Initiative:  Hearings on                
               S. 1951 (Reemployment Act of 1994) Before the Senate                   
               Comm. on Finance, 103d Cong., 2d Sess. (May 26, 1994)                  
               (statement of Robert B. Reich, Secretary of Labor);                    
               emphasis added.]                                                       
               The activities of petitioner fall outside of the definition            
          of “charitable” under section 501(c)(3).  Petitioner trains                 
          individuals to fill temporary positions as secretaries, word                
          processors, desktop publishers, data entry operators, general               
          clerical workers, receptionists, and light industrial laborers.             
          Petitioner also assists clients in finding a chain of temporary             
          jobs so that a client will have employment year-round.                      
          Petitioner encourages clients to create an independent contractor           
          relationship with temporary employers by using a limited                    
          liability company to market the services of the client.  The act            
          of creating a limited liability company might also prevent a                
          client from being labeled as an employee of petitioner.  These              
          activities are indistinguishable from the activities of a for-              
          profit temporary service agency.                                            

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