DocketNumber: Docket No. 920-14X.
Citation Numbers: 2016 T.C. Memo. 223, 112 T.C.M. 637, 2016 Tax Ct. Memo LEXIS 221
Filed Date: 12/12/2016
Status: Non-Precedential
Modified Date: 4/18/2021
Decision will be entered for respondent.
ARMEN,
The parties submitted to the Court the administrative record upon which respondent made the final adverse determination. The parties agree that the administrative record is complete and genuine. For purposes of this proceeding, the facts and representations in the administrative record, as well as those in the stipulation filed February 6, 2015, are accepted as true and are incorporated herein by this reference.
Petitioner was organized as a nonprofit corporation under the laws of the District of*222 Columbia on January 10, 2001. Petitioner was incorporated as ABF Educational Foundation, Inc., but since its incorporation has operated under the names Congressional Education Foundation, Congressional Education Foundation for Public Policy, and most recently Community Education Foundation. *225 Petitioner's principal office or agency was in Baltimore, Maryland, at the time that its petition was filed with the Court. Petitioner's sole officer, director, and representative is D. Dante Anthony Hayes.
According to its articles of incorporation petitioner is "organized exclusively for charitable and educational purposes within the meaning of
On or about June 27, 2001, Mr. Hayes submitted Form 1023, Application for Recognition of Exemption Under The ABF Educational Foundation, Inc. (the "Foundation") is a conservative research and educational institute focusing on public policy issues that have particular impact on African Americans, Hispanic Americans, Asian Americans, Native Americans, and heritage groups (the "Target Groups"). The Foundation's guiding principle is to encourage open inquiry about public policy issues that are*223 of particular interest and educational value for the Target Groups and the public in general and to provide programs that highlight and educate the Target Groups and the public about these germane subjects and/or public policy issues. * * * * To achieve this goal, the Foundation will undertake a variety of activities, including: 1. Town hall meetings: The Foundation will sponsor a minimum of twenty televised or non-televised town hall meetings on university campuses across the United States to the general public, particularly *226 minorities in the education profession, health care profession, legal profession, business and civic leaders, religious leaders, labor union members, college and university students. Each town hall meeting will discuss the reformation of tax, education, social security, health care, racial profiling, business and economic development. The purpose of these town hall meetings is to help the American public, particularly minorities, have a better understanding of conservative public policy initiatives. The Foundation's staff and consultants will work to develop and conduct these monthly town hall meetings that are scheduled to start in September 2001. This activity*224 will account for roughly 25 percent of the Foundation's resources and time in any given year. 2. National workshops: The Foundation will sponsor twenty national workshops in highschool auditoriums, college campuses, convention centers, church auditoriums and hotels across the United States * * *. The Foundation's staff and consultants will work to develop and organize these national workshops that are scheduled to start in October 2001. This activity will account for roughly 55 percent of the Foundation's resources and time in any given year. 3. Congressional forums: The Foundation will sponsor quarterly educational forums for public officials, non-profits, opinion pollsters, business leaders and the media to better understand minorities and their perception on certain public policy initiatives that impact their daily lives. The Foundation's staff will work to develop and organize these congressional forums that are scheduled to start in November 2001. This activity will account for roughly 10 percent of the Foundation's resources and time in any given year. 4. Media/Communication: As part of the Foundation's efforts to raise awareness and understanding of the conservative public policy*225 initiatives to the minorities and the general public, the Foundation will communicate these policy initiatives across the country via billboards, radio, televisions, etc. The Foundation staff and consultants will work to develop the messages to be advertised. This *227 activity will account for roughly 10 percent of the Foundation's resources and time in any given year.
Petitioner did not, over time, meaningfully organize or allocate resources to any of the four aforementioned and enumerated activities.
On July 23, 2001, respondent granted petitioner tax-exempt status under
On September 21, 2012, respondent issued to petitioner a letter proposing to revoke petitioner's tax-exempt status under
On October 19, 2012, petitioner timely sent a written protest (protest) to the Internal Revenue Service Appeals Office. In the protest, petitioner admitted that*226 it was inactive from September 2001 through December 2008; however, it asserted *228 that it tried, but failed, to host various events in 2009 and 2010. Thus, according to petitioner, it attempted to organize a "Presidential Inaugural Ball" to honor veterans (Veterans' Inaugural Ball) in 2009, as well as a series of town hall meetings and benefit concerts in 2010, generally oriented towards veterans.3
On October 22, 2013, respondent issued to petitioner a final adverse determination revoking its
On*227 January 15, 2014, petitioner commenced the instant case by filing a petition for a declaratory judgment.
In a declaratory judgment action brought under
Tax exemption is a matter of legislative grace, and an organization seeking an exemption must prove that it "comes squarely within the terms of the law conferring the benefit sought."
Generally speaking,*228 an organization described in
The parties dispute whether petitioner is
In applying the operational test, "exclusively" does not mean "solely" or "absolutely without exception".
Exempt purposes are those specified in
Petitioner admits that it was inactive from September 2001 through December 2008 but contends that it tried to host events in 2009 and 2010 that for various reasons never occurred.
To the extent that*230 the parties disagree over why certain events contemplated by petitioner did not materialize, the Court need not resolve that dispute as it is not relevant to our conclusion. Instead, the Court focuses on petitioner's exempt purpose and the activities that it engaged in, or, more to the point, failed to engage in, with respect to that purpose.
According to its application petitioner intended to further its exempt purpose by organizing monthly town hall meetings, 20 national workshops yearly, and quarterly congressional forums in addition to a nationwide media campaign. The application allocates petitioner's time and resources as follows: (1) 25% to town hall meetings, beginning September 2001; (2) 55% to national workshops, beginning October 2001; (3) 10% to congressional forums, beginning November *234 2001; and (4) 10% to its nationwide media campaign. Notably, petitioner did not over time meaningfully organize or allocate resources to any of the aforementioned activities. Accordingly, on the basis of the record before us, the Court concludes that petitioner failed to satisfy the operational test because it did not engage in any activity that accomplished one or more of the exempt purposes*231 in
To reflect the foregoing,
1. Unless otherwise indicated, all section references are to the Internal Revenue Code, as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure.↩
2.
The letter stated that "based on CEF's [Community Education Foundation's] and Mr. Hayes' continued failures (including failing to respond to summons) to provide any meaningful evidence of it having conducted any charitable activities CEF has failed to establish that it meets the operational test requirements under
3. The circumstances surrounding the organization of such contemplated events are less than clear although the administrative record as stipulated by the parties includes a March 16, 2010, article in the Army Times stating that "sponsors, entertainers and ticketholders [were left] in the lurch" when the Veterans' Inaugural Ball was not held. The article further stated that the Baltimore, Maryland, Department of Recreation and Parks did not have a permit request regarding petitioner's promotion of a "star studded benefit concert" at Carroll Park in Baltimore, nor were the featured entertainers officially scheduled to perform at any such concert.
According to petitioner's version of the events, the Veterans' Inaugural Ball fell through because Mr. Hayes found his cosponsor to be misleading and other unnamed cosponsors "could not get past the fact that" (1) "we were all Republicans, supported President George W. Bush, and the war in Afghanistan and Iraqi [sic]" and (2) the "CEF [Community Education Foundation] former President * * * was indicted in Colorado on issues relating to money and the Kuwaiti Government". With respect to petitioner's contemplated events for 2010, it contends that it was not able to find corporate sponsors for those events because of an unflattering article in the Washington Post, as well as the March 16, 2010, article in the Army Times.↩
4. When a party fails to file a brief altogether, such a failure has been held by this Court to justify the dismissal of all issues as to which the nonfiling party has the burden of proof.
5. In
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