IHC Group, Inc. - Page 21




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               insubstantial part of its activities is not in                         
               furtherance of an exempt purpose.                                      
          The operational test focuses on the actual purposes the                     
          organization advances by means of its activities, rather than on            
          the organization's statement of purpose or the nature of its                
          activities.  See Am. Campaign Acad. v. Commissioner, supra at               
          1064; Aid to Artisans, Inc. v. Commissioner, supra at 210-211.              
          Although an organization might be engaged in only a single                  
          activity, that single activity might be directed toward multiple            
          purposes, both exempt and nonexempt.  See Redlands Surgical                 
          Servs. v. Commissioner, 113 T.C. 47, 72 (1999), affd. per curiam            
          242 F.3d 904 (9th Cir. 2001).  "[T]he presence of a single                  
          * * * [non-exempt] purpose, if substantial in nature, will                  
          destroy the exemption regardless of the number or importance of             
          truly * * * [exempt] purposes."  Better Bus. Bureau, Inc. v.                
          United States, 326 U.S. 279, 283 (1945); see Manning Association            
          v. Commissioner, 93 T.C. 596, 603-605 (1989); Am. Campaign Acad.            
          v. Commissioner, supra at 1065.                                             
               Whether an organization operates for a substantial nonexempt           
          purpose is a question of fact to be resolved on the basis of all            
          the evidence presented in the administrative record.  See Church            
          By Mail, Inc. v. Commissioner, 765 F.2d 1387, 1390 (9th Cir.                
          1985), affg. T.C. Memo. 1984-349.  For purposes of the instant              
          proceeding, we assume that the facts as represented in the                  
          administrative record are true, although in the course of our               





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