17 T.C. 899 | Tax Ct. | 1951
Lead Opinion
OPINION.
Was the petitioner exempt from Federal income taxation under the language of section 101 (6), Internal Kevenue Code?
We think none of the differences between this case and C. F. Mueller, suggested by either party here, are material to the prime consideration decided by us in C. F. Mueller, supra, and disapproved in the reversal by the United States Court of Appeals, Third Circuit, but approved by the United States Court of Appeals, Fourth Circuit, in the Community Services case. That prime consideration is, in effect, whether the destination of the income is more important than source. Despite reversal in the Mueller case, we have recently, in Joseph B. Eastman Corporation, 16 T. C. 1502, adhered to our views on the question, (though because of section 601, Revenue Act of 1951, it has since been disposed of by stipulation). Following the Mueller case and with all due respect to the United States Court of Appeals, Third Circuit, we conclude and hold that the petitioner is not exempt from taxation under section 101 (6), Internal Revenue Code.
Decision will be entered for the respondent.
SEC. 101. EXEMPTIONS FROM TAX ON CORPORATIONS.
The following organizations shall be exempt from taxation under this chapter—
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(6) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation;
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