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Commissioner, 70 T.C. 594 (1978). Petitioner testified that the
Center distributed the books at cost; however, he introduced no
evidence in support of this statement. Absent introduction of
any financial statements from the Center whatsoever, the Court
cannot evaluate whether the Center did not in fact profit from
the publishing and distribution of books. Therefore, the Court
finds that the publishing and distributing of books by the Center
was a substantial nonexempt activity.
The existence of this substantial nonexempt purpose
precludes the Center from qualifying as an exempt organization
under section 501(c)(3). In addition, the nature of this
nonexempt activity, publishing books, was conducted for the
exclusive benefit of petitioner, not the public. As noted above,
petitioner authored each of the books the Center published. He
then paid all publishing costs from his personal bank account and
deducted the costs as a charitable deduction on his Federal
income tax returns. Respondent argues that petitioner
essentially incorporated the Center to enable the publishing of
books he authored. Respondent’s argument is well founded. As
previously noted, petitioner’s testimony was that a substantial
percentage of his earnings went to the Center; yet, his was the
sole authorized signature of this account. No evidence was
offered to establish that the Center had members or received
contributions from others. The Center did not maintain any books
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