IHC Care, Inc. - Page 17




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          health plans.  Petitioner did not subsidize premiums for persons            
          who were unable to afford its premiums, and petitioner did not              
          retain existing enrollees who failed to pay their premiums.                 
          Petitioner did not conduct any medical, health care, or                     
          scientific research.                                                        
          III.  Petitioner’s Application for Exemption                                
          In 1986, petitioner filed with respondent an application for                
          recognition as an organization described in section 501(c)(3)               
          that is exempt from taxation pursuant to section 501(a).                    
          Petitioner’s application stated that it intended to operate for             
          the charitable purpose of promoting health for the benefit of the           
          community.                                                                  
               On October 29, 1998, respondent issued a final adverse                 
          determination letter to petitioner denying its application for              
          tax-exempt status pursuant to section 501(c)(4).  The record does           
          not reflect the date that petitioner filed its application for              
          exemption under section 501(c)(4) or whether petitioner filed a             
          petition for declaratory judgment with the Court challenging                
          respondent’s determination under section 501(c)(4).                         
          On June 16, 1999, respondent issued a final adverse                         
          determination letter to petitioner denying its application for              
          tax-exempt status pursuant to section 501(c)(3).  Respondent                
          determined that petitioner did not qualify as an organization               
          described in section 501(c)(3) on the ground that petitioner was            






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