Salvation Navy, Inc. - Page 8

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               501(c)(3).  An organization will not be so regarded if                 
               more than an insubstantial part of its activities is                   
               not in furtherance of an exempt purpose.  [Sec.                        
               1.501(c)(3)-1(c)(1), Income Tax Regs.]                                 
               As already noted, SNI desires recognition of exemption from            
          the date the Form 1023 was received by the IRS, and not                     
          retroactively.  As also indicated above, SNI responded to a                 
          request for a detailed description of its contemplated future               
          activities by reiterating a description of the activities in                
          which Valfer was already engaged.  In its brief SNI concedes that           
          “the Petitioner, SNI, and David A. Valfer are one and the same.”            
          However, SNI challenges respondent’s contention that                        
          contributions to SNI inure to Valfer’s benefit, because “The                
          plain fact is that no contributions of either money or services             
          have been received by SNI from any source other than Mr. Valfer.”           
          Nevertheless, Valfer, responding on behalf of SNI to the July 19,           
          1999 IRS letter, stated that he would like to receive “a Tax                
          Exempt letter to apply for a grant to procure a computer,                   
          printer, and related software.”  Since the affairs of SNI and               
          Valfer are irretrievably intertwined, as Valfer/SNI readily                 
          admits, the benefits Valfer plainly hopes to obtain via the “Tax            
          Exempt letter” would obviously inure to Valfer himself.                     
               Similarly, SNI has not shown that compensation for Valfer’s            
          serving as a Shomer at a rate of $75 to $90 per 12-hour vigil               
          would not inure to a private individual.  Petitioner SNI has not            
          shown that the recipients of Valfer’s services as a Shomer are              

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