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In addition, some of petitioner’s materials contain
distortions of fact. Distortion of facts is the second negative
factor of the methodology test of Rev. Proc. 86-43, 1986-2 C.B.
729, applied by the Commissioner during the administrative
process. The methodology test is applied to resolve whether a
taxpayer is operated exclusively for educational purposes and
includes:
1. Whether or not the presentation of viewpoints
unsupported by a relevant factual basis constitutes a significant
portion of the organization’s communications.
2. To the extent viewpoints purport to be supported by a
factual basis, are the facts distorted.
3. Whether or not the organization makes substantial use of
particularly inflammatory and disparaging terms, expressing
conclusions based on strong emotional feelings rather than
objective factual evaluations.
4. Whether or not the approach to a subject matter is aimed
at developing an understanding on the part of the addressees, by
reflecting consideration of the extent to which they have prior
background or training.
In Nationalist Movement v. Commissioner, 102 T.C. 558
(1994), affd. 37 F.3d 216 (5th Cir. 1994), this Court addressed
the issue of whether Rev. Proc. 86-43, supra, is constitutional,
which is raised by petitioner in this case. The taxpayer in
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Last modified: May 25, 2011