- 11 -
expressly empower it to engage, except in insubstantial part, in
activities not in furtherance of exempt purposes. See sec.
1.501(c)(3)-1(b)(1)(i)(a) and (b), Income Tax Regs.
With respect to the operational test:
An organization will be regarded as “operated
exclusively” for one or more exempt purposes only if it
engages primarily in activities which accomplish one or
more of such exempt purposes specified in section
501(c)(3). An organization will not be so regarded if
more than an insubstantial part of its activities is
not in furtherance of an exempt purpose. [Sec.
1.501(c)(3)-1(c)(1), Income Tax Regs.]
Additionally, although an organization may be engaged only in a
single activity directed toward multiple purposes, both exempt
and nonexempt, failure to satisfy the operational test will
result if any nonexempt purpose is substantial. See Redlands
Surgical Servs. v. Commissioner, supra at 71; Copyright Clearance
Ctr., Inc. v. Commissioner, supra at 803-804.
Exempt purposes, in turn, are those specified in section
501(c)(3), such as religious, charitable, scientific, and
educational. See sec. 1.501(c)(3)-1(d)(1)(i), Income Tax Regs.
Charitable is further defined as follows:
The term “charitable” is used in section 501(c)(3) in
its generally accepted legal sense and is, therefore,
not to be construed as limited by the separate
enumeration in section 501(c)(3) of other tax-exempt
purposes which may fall within the broad outlines of
“charity” as developed by judicial decisions. Such
terms include: Relief of the poor and distressed or of
the underprivileged; advancement of religion;
advancement of education or science; erection or
maintenance of public buildings, monuments, or works;
lessening of the burdens of Government; and promotion
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011