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The term “educational” as used in section 501(c)(3) is
defined as the instruction or training of the individual for the
purpose of improving or developing his capabilities or the
instruction of the public on subjects useful to the individual
and beneficial to the community. An organization may be
educational even though it advocates a particular position or
viewpoint. See sec. 1.501(c)(3)-1(d)(3)(i), Income Tax Regs.
Petitioner argues that its activities, which promote free
speech and create forums for the exchange of ideas and
information, are charitable and educational by nature. The
rationale of petitioner is that freedom of speech is the highest
national priority, and, if freedom is extended to even one group
or individual, all Americans benefit. Respondent claims that
petitioner has failed to prove that its activities are charitable
and educational within the meaning of section 501(c)(3).
In order to gain section 501(c)(3) status, a taxpayer must
openly and candidly disclose all facts bearing upon the
organization, its operations, and its finances so that the Court
may be assured that it is not sanctioning an abuse of the revenue
laws by granting a claimed exemption. Where such a disclosure is
not made, the logical inference is that the facts, if disclosed,
would show that the taxpayer fails to meet the requirements of
section 501(c)(3). See Bubbling Well Church v. Commissioner, 74
T.C. 531, 535 (1980), affd. 670 F.2d 104 (9th Cir. 1981).
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Last modified: May 25, 2011