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scrutiny of a public charity. The Treasury Regulations
therefore provide that the supporting organization must
be responsive to the needs of the public charity and
intimately involved in its operations. [Quarrie
Charitable Fund v. Commissioner, 603 F.2d 1274, 1277-
1278 (7th Cir. 1979), affg. 70 T.C. 182 (1978); fn.
refs. omitted.]
A. Section 509(a)(3)(A)
Regulations promulgated under section 509(a)(3) set forth
tests expounding on the requirements recited in subparagraphs (A)
through (C) above. Section 1.509(a)-4(b) through (e), Income Tax
Regs., specifies organizational and operational tests that relate
to the criteria of section 509(a)(3)(A). The organizational test
is not at issue in this proceeding, and because respondent raises
no arguments under the operational test distinct from those
addressed more fully by respondent in connection with
subparagraphs (B) and (C), we do not separately discuss the
elements and tests of section 509(a)(3)(A).
B. Section 509(a)(3)(B)
Section 509(a)(3)(B) prescribes the nature of the
relationship that must exist between the supporting organization
and the publicly supported organization. Regulations elaborate
that the statute requires one of the following three
relationships to be present: (1) The supporting organization may
be operated, supervised, or controlled by one or more publicly
supported organizations (comparable to a parent-subsidiary
relationship where the supporting organization is under the
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