In Uncategorized on 12/12/2016 at 16:59

The Judge With a Heart, STJ Armen, has before him the revocation of the 501(c)(3) of Community Education Foundation, 2016 T. C. Memo. 223, filed 12/12/16.

CEF was formerly known 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.” 2016 T. C. Memo. 223, at p.  2.

The sole officer, director and representative of CEF timely petitioned, but did not engage fully thereafter, and did not file a brief when directed by STJ Armen.

Judges do get peeved when ignored, but STJ Armen, exercising his hearty discretion, elects not to toss CEF on that ground.

CEF did nothing for the first seven years of its life, but then tried to run a Veterans’ Inaugural Ball, which fizzled.

There’s a jumpball over why the fizzle. CEF’s sole officer, director and representative stiped to the administrative record.

The record contains an “…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. H 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 [the next year] 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… article in the Army Times.” 2016 T. C. Memo. 223, at p. 6, footnote 3.(Name omitted).

As this is a nonpolitical blog, I can only reiterate: Stipulate, don’t capitulate. Especially don’t stipulate to hearsay.

Howbeit, STJ Armen sees no need to figure out why CEF didn’t bring off the Veterans’ Inaugural Ball.

“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…; (2) 55% to national workshops…; (3) 10% to congressional forums…; 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 in section 501(c)(3).  The Court therefore holds that regardless of the applicable standard of review, see supra note 5, respondent properly revoked petitioner’s tax-exempt status… because it was not operated exclusively for an exempt purpose.” 2016 T. C. Memo. 223, at pp. 11-12.

Remember, in the 501(c)3 context, “operated exclusively” means operated primarily, with only an insubstantial noncharitable activity. STJ Armen has lots of cases cited for your brief file.


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