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prove that it falls within the terms of the quoted text.5 See
Harding Hosp., Inc. v. United States, 505 F.2d 1068, 1071 (6th
Cir. 1974); see also Fla. Hosp. Trust Fund v. Commissioner, 103
T.C. 140, 146 (1994) (taxpayers generally bear the burden of
proving that the Commissioner improperly revoked an exemption
from tax under section 501), affd. 71 F.3d 808 (11th Cir. 1996).
In order for petitioner to prevail on the issue that we
decide herein, we must find that petitioner was both organized
and operated exclusively for one or more exempt purposes. See
sec. 1.501(c)(3)-1(a), Income Tax Regs. We focus on the
statute’s requirement as to operation because the parties do not
dispute the statute’s requirement as to organization. Under the
regulations, 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 501(c)(3).” Sec.
5 Sec. 7491(a) was added to the Code by the Internal Revenue
Service Restructuring and Reform Act of 1998, Pub. L. 105-206,
sec. 3001(c), 112 Stat. 727, effective for court proceedings
arising from examinations commencing after July 22, 1998. Sec.
7491(a)(1) provides that the burden of proof shifts to the
Commissioner in specified circumstances. We need not and do not
decide whether sec. 7491(a)(1) applies in the setting of a
declaratory judgment action such as we have here. Petitioner in
its posttrial brief makes no mention of sec. 7491(a)(1), and we
conclude that, even if sec. 7491(a)(1) did apply in the setting
of a declaratory judgment action, it would not apply here. See,
e.g., sec. 7491(a)(2) (sec. 7491(a)(1) applies with respect to an
issue only if the taxpayer establishes certain requirements); see
also Mediaworks, Inc. v. Commissioner, T.C. Memo. 2004-177.
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