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3. Whether Petitioner Would Not Operate for a Substantial
Nonexempt Purpose
An organization is not organized or operated exclusively for
exempt purposes under section 501(c)(3) unless it serves a public
interest, rather than a private one. Bob Jones Univ. v. United
States, 461 U.S. 574, 592 (1983); sec. 1.501(c)(3)-1(d)(1)(ii),
Income Tax Regs. To satisfy this requirement, the organization
must not be organized and operated for the benefit of private
interests, such as those of its creator or the creator’s family.
Am. Campaign Acad. v. Commissioner, 92 T.C. at 1065-1067.
a. Private Interests of Mr. Dennis
Mr. Dennis controls petitioner. He and his wife were
petitioner’s only directors at formation and listed on its
application for exemption. Mr. Dennis is petitioner’s president
and CEO, and a full-time employee, indeed, petitioner’s only
employee. Mr. Dennis’s compensation will be based, at least in
part, on the growth of petitioner’s portfolio of DMPs. Thereby,
his pay incentive parallels petitioner’s immediate goal to launch
its DMP operations to focus initially on offering the best DMP
platform in the marketplace, to offer DMP services nationally, to
strictly emphasize DMP origination and servicing, to fully
concentrate on offering the DMP, to keep the DMP service in the
forefront, and to use advertising to enable further brand
recognition. The record thus indicates that Mr. Dennis formed
petitioner to be a family-controlled business that he personally
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