- 21 -
regulations are the length and nature of the relationship
between the beneficiary and supporting organization, the
purpose to which the funds are put, the amount of the
support as a percentage of the total support of the
publicly supported organization, and evidence of actual
attentiveness by the beneficiary organization. Id.
Petitioner's position is that it satisfies the
"integral part test" prescribed by section 1.509(a)-
4(i)(3)(iii), Income Tax Regs., and, therefore, should be
considered as being "operated in connection with" Keswick
for purposes of determining whether it is a supporting
organization under section 509(a)(3)(B). In applying the
integral part test, petitioner argues that its support to
Keswick is earmarked "for a particular program or activity,
that being the application of the Trust funds for the
purpose of making the Day Care Program of the supported
organization available to those qualified individuals
unable to pay the full cost of the day care tuition."
According to petitioner, Keswick's letters show that
"Fifty Percent of all grants coming from the grant program
came from the funds distributed to Keswick by the Trust
(i.e. petitioner)." Petitioner argues:
Fifty percent of all funds utilized by the grant
program constitutes a sufficient part to insure
attentiveness. To reduce by one half, the number
of recipients of grants would severely impair the
existing grant program and cause a discontinuance
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011