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Petitioner’s Application for Exemption
On October 15, 2001, petitioner submitted to respondent Form
1023, Application for Recognition of Exemption Under Section
501(c)(3) of the Internal Revenue Code. Part II of Form 1023
requests a “detailed narrative description of all the activities
of the organization--past, present, and planned.” In response to
this inquiry, petitioner’s application stated:
CRSO owns real estate in Wenatchee, Washington, which
is used as a shopping center. Its revenue is derived
from triple net leases on that property to unrelated
third parties. CRSO is a “supporting organization” for
Chi Rho Corporation, a California corporation holding a
Section 501(c)(3) exemption.
Petitioner’s Income Tax Returns
For taxable years 2001, 2002, 2003, and 2004, petitioner
reported the following figures on its Forms 990-T, Exempt
Organization Business Income Tax Return:
Gross
unrelated Unrelated Unrelated
debt- Average business business
Gross financed acquisition taxable income
Year rents income debt ratio income tax
2001 $275,570 $144,233 52.34% $37,684 $5,653
2002 280,577 147,107 52.43 50,234 7,559
2003 254,317 130,643 51.37 30,064 4,510
2004 228,116 113,168 49.6 16,655 2,498
Denial of Petitioner’s Application for Exemption
By letter dated November 8, 2002, respondent’s Exempt
Organizations Division proposed to deny petitioner’s request for
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Last modified: November 10, 2007