- 9 -
zation, thereby failing the "integral part test"
set forth in the regulations. Consequently, your
organization does not qualify as a supporting
organization within the meaning of section
509(a)(3) of the Code.
Petitioner's attorneys filed a letter with
respondent's Office of Appeals appealing the proposed
adverse ruling. In the letter, they state that
petitioner's support is earmarked by the controlling
document to provide "grants associated with Keswick's
Adult Day Care Program", that petitioner "provides up to
50 percent of the grant money provided to 100 percent of
all grant recipients", that the "Keswick Day Care Program
is a substantial program providing day care for 139 adults
within the Baltimore Metropolitan area", and "without the
funds provided by the Cuddeback Memorial Fund, the grant
program would be severely curtailed, and a significant
number of individuals would be unable to receive financial
assistance in connection with the Adult Day Care Program".
The letter further states that, under section 1.509(a)-
4(i)(3)(iii)(b), Income Tax Regs., in determining the
attentiveness of the beneficiary organization, "the total
support for the day care grant program" is substituted for
"the total support of the beneficiary organization." On
that basis, petitioner's attorneys state "the attentiveness
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