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its tax-exempt parent somehow enhances or “boosts” its own tax-
exempt character to the point that the organization would qualify
for tax-exempt status. Id. Focusing solely on the latter issue,
the Court of Appeals concluded that Geisinger HMO was not
entitled to tax-exempt status because it did not receive the
necessary boost from its relationship with exempt Geisinger
entities. In particular, the Court of Appeals held:
As our examination of the manner in which * * *
[Geisinger HMO] interacts with other entities in the
System makes clear, its association with those entities
does nothing to increase the portion of the community
for which * * * [Geisinger HMO] promotes health–-it
serves no more people as a part of the System than it
would serve otherwise. * * * [Id. at 502.]
Under the circumstances, the Court of Appeals concluded that it
was unnecessary to consider whether Geisinger HMO’s activities
would constitute an unrelated trade or business if regularly
carried on by a related tax-exempt entity. Id. at 501.
Analysis
Consistent with the preceding discussion, petitioner’s
qualification for exemption pursuant to section 501(a) as an
organization described in section 501(c)(3) initially depends
upon whether petitioner satisfies the community benefit test. In
the event that petitioner cannot satisfy the community benefit
test, we must consider whether petitioner nevertheless qualifies
for exemption as an integral part of a related tax-exempt entity.
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