- 11 - The only real difference between petitioner and a for-profit temporary service agency is that petitioner does not charge local businesses the standard markup that such agencies routinely collect for services. However, this Court has held in analogous circumstances that furnishing services to local businesses at cost does not establish that an activity is charitable. See B.S.W. Group, Inc. v. Commissioner, 70 T.C. 352, 360 (1978). In B.S.W. Group, a taxpayer’s sole activity was offering consulting services at cost to nonprofit, limited resource organizations engaged in various rural-related activities. Some, but not all, of the clients of the taxpayer were other exempt organizations. Services of the taxpayer consisted of obtaining individuals to perform research projects for the clients. The individuals that were engaged received fees for their services. This Court held that the taxpayer did not operate exclusively for charitable purposes as required by section 501(c)(3) because its primary purpose was commercial rather than educational, charitable, or scientific. See B.S.W. Group, Inc. v. Commissioner, supra. The activities of petitioner similarly constitute the conduct of a temporary service agency, which is essentially a commercial venture. Petitioner’s own services or the services of its clients are in direct competition with for-profit businessesPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011