Salvation Navy, Inc. - Page 7

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          organized and operated exclusively for * * * charitable * * *               
          purposes, * * * no part of the net earnings of which inures to              
          the benefit of any private shareholder or individual.”  (Emphasis           
          added.)  Thus, the organization must be both organized and                  
          operated exclusively for at least one of the stated purposes.               
          Sec. 1.501(c)(3)-1(a)(1), Income Tax Regs.                                  
               Respondent concedes that once SNI amended its Articles of              
          Incorporation to delete that one of its purposes was to “find out           
          where one goes when he or she leaves”, so that the Articles now             
          reflect that SNI’s activities would be limited to charitable,               
          religious, educational, literary, and/or scientific purposes, SNI           
          meets the organizational test.  However, respondent asserts that            
          SNI fails to meet the operational test because SNI has not shown            
          that it is not operated for the benefit of a private individual;            
          i.e., David A. Valfer.  See sec. 1.501(c)(3)-1(d)(1)(ii), Income            
          Tax Regs.                                                                   
               We agree with respondent.  As stated in the regulations, the           
          operational test is as follows:                                             
               An organization will be regarded as “operated                          
               exclusively” for one or more exempt purposes only if it                
               engages primarily in activities which accomplish one or                
               more of such exempt purposes specified in section                      

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Last modified: May 25, 2011