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tax-exempt status. The letter concluded that petitioner is a
feeder organization described under section 502 and does not meet
the operational test for exemption under section 501(c)(3).
By letter dated November 25, 2002, petitioner requested a
hearing with respondent’s Appeals Office concerning this matter.
In a letter dated November 4, 2003, the Appeals Office made a
“final adverse determination”, concluding:
Your only activity is the rental of improved real
property and forwarding net funds to an organization
described in section 501(c)(3). Your primary purpose
is to operate a trade or business for profit. As such,
you are an organization described in section 502(a).
You are not entitled to the exception set forth in
section 502(b)(1) because not all of your rents would
be excluded under section 512(b)(3). Finally, you did
not establish that you were operated exclusively for
one or more purposes specified under section 501(c)(3)
of the Code.
Respondent initially sent the determination letter to an
incorrect address. Petitioner received the determination letter
only after respondent mailed it by certified mail to petitioner’s
counsel on June 14, 2005. On June 27, 2005, petitioner filed its
petition requesting section 7428 declaratory relief as to its
tax-exempt status under section 501(c)(3).
Discussion
A. Jurisdiction Our jurisdiction over this action for
declaratory relief depends upon the filing of a timely petition.2
2 The parties do not disagree that petitioner timely filed
its petition and that we have jurisdiction pursuant to sec.
(continued...)
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