                        T.C. Memo. 2005-30



                      UNITED STATES TAX COURT



              AMEND16ROBERTWIRENGARD, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18437-03X.           Filed February 22, 2005.


     R.O. Wirengard (an officer), for petitioner.

     Helen F. Rogers, for respondent.



                        MEMORANDUM OPINION


     WELLS, Judge:   In a final adverse determination letter,

respondent determined that petitioner did not qualify for

exemption from Federal income taxation pursuant to section 501(a)

as an organization described in section 501(c)(3).1   Having


     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended, and all Rule references
                                                   (continued...)
                               - 2 -

exhausted its administrative remedies, petitioner challenged

respondent’s determination by timely filing a petition for a

declaratory judgment pursuant to section 7428(a).   The

administrative record was submitted to the Court by joint motion

pursuant to Rules 122 and 217(b).   For purposes of the instant

proceeding, the facts and representations contained in the

administrative record are accepted as true and are incorporated

herein by reference.   The sole issue to be decided is whether

petitioner qualifies for tax exemption as an organization

described in section 501(c)(3).

                            Background

     On or about August 16, 2001, petitioner filed a Form 1023,

Application for Recognition of Exemption Under Section 501(c)(3)

of the Internal Revenue Code (Form 1023).   In its Form 1023,

petitioner reported that it was organized as an association and

that it had an address in Hillsborough County, Florida.

     In the Form 1023, petitioner reported that it was a school.

Petitioner’s Web site described petitioner as a “free school”

whereby education is provided via the Internet on how to obtain a

microloan; how to establish an IRA; how to obtain health care;

and how to “think about reality or other religions”.    An article

on petitioner’s Web site entitled “Article of an Unincorporated,



     1
      (...continued)
are to the Tax Court Rules of Practice and Procedure.
                              - 3 -

Non-Profit Individual Organization” stated that the purpose of

the organization is “to educate as many people as possible about

the existing Amendment 16 of the Constitution of the United

States of America, its fundamental flaws that are contrary to the

views of our founding fathers and ways to correct these.”

     Along with its Form 1023, petitioner submitted articles of

association2 (hereinafter referred to as the Articles).   The

Articles provided:

                           ARTICLE III
                             PURPOSES

     Amend16robertwirengard is not for profit and organized
      exclusively for educational, welfare and charitable
                     purposes, including to:

     1.   Provide education and advocacy, principally of the
          economic and financial sciences
     2.   Provide for food, shelter, healthcare,
          access/transportation and environments
     3.   Study, research and test welfare, healthcare and
          environmental models
     4.   Identify socio-economic and sustainability
          problems and provide economic solutions
     5.   Assist and organize employees and unemployed and
          unpaid workers for their and children’s welfare


     2
      The record shows that petitioner submitted to respondent
drafts of its articles of association on three separate
occasions. Each of the three drafts was dated Aug. 31, 2001.
The first draft was signed only by Robert Wirengard and submitted
as an attachment to petitioner’s Form 1023. The second draft,
set forth above, was identical to the first, except that it was
signed by all four directors and was submitted by petitioner as
an attachment to a letter to respondent dated Oct. 9, 2001. The
third draft was not identical to the first two drafts but was
substantially similar; it was signed by Robert Wirengard and
Mauricio Rosas and submitted by petitioner as an attachment to a
letter to respondent dated Apr. 3, 2003. The signature of
Mauricio Rosas was dated Apr. 3, 2003.
                           - 4 -

6.   Study, assist and organize economic welfare
     arrangements and alliances for and/or with other
     community concerns, including employee, employer,
     government, faith based, corporate, other business
     and environmental entities
7.   Publish economic mechanisms and applications based
     on Nobel Laureate types of economic and financial
     theories; as well, publish test conclusions of
     models built, be they successful or failures (and
     how they may be amended or corrected to build a
     sustainable universe)

          *    *    *      *       *   *   *

                         ARTICLE VI
                           BY-LAWS

Provisions for the regulations of the internal affairs
of Amend16robertwirengard are to be determined and set
forth in the By-Laws. The Board of
Amend16robertwirengard shall adopt the original By-
Laws. Thereafter, By-Laws may be adopted, amended or
repealed by the Board of Directors in accordance with
the By-Laws. Any decision before the board must be
concluded with unanimous vote, in favor or against.

          *    *    *      *       *   *   *

                        ARTICLE VIII
                          OVERSEERS

The number of Directors of Amend16robertwirengard shall
be three, or more than three, as fixed from time to
time by the By-Laws of Amend16robertwirengard. The
number of Directors constituting the initial Board of
Directors is four, and the names and addresses of the
persons who are to serve as directors or overseers
until their successors are elected or otherwise
appointed and shall qualify are:

Robert Wirengard
6234 Falkenburg Road North
Fair Share, FL 33610-9491

(Note, “Fair Share” is not within Tampa city limits, is
in an unincorporated area of Hillsborough County, and
                                - 5 -

     our post office, approving the name so long as the
     correct zip code is used, delivers to our Fair Share
     address).

     Mauricio Rosas
     P.O. Box 7641
     Tampa, FL 33673

     John Larsen
     532 De Resine Carre
     Seffner, FL 33532

     Tom Hoyt
     611 De Resine Carre
     Seffner, FL 33584

               *       *    *   *       *   *   *

     IN WITNESS WHEREOF, I have executed these Articles of
     Amend16robertwirengard in duplicate this 31st day of
     August 2001, and say that I know the contents thereof
     and am liable for the entity, both economically and
     financially, and to the letter and in the spirit of
     governing laws.

     (Signed ROWirengard)

     Robert Wirengard, FOUNDER, PRINCIPAL AND AGENT

     Mauricio Rosas, Board of Directors

     (Signed Mauricio Rosas)

     Thomas Hoyt, Board of Directors

     (Signed Thomas Hoyt)

     John Larsen, Board of Directors

     (Signed John Larsen)

     Petitioner subsequently submitted to respondent a

document entitled “Agreement to Amend” (hereinafter referred

to as the Agreement) in which petitioner agreed to “enact”

the following amendment to the Articles:
                                - 6 -

     a.     The organization is organized exclusively for
            charitable, religious, educational, and/or
            scientific purposes under section 501(c)(3) of the
            Internal Revenue Code.

     b.     No part of the net earnings of the organization
            shall inure to the benefit of, or be distributable
            to, its members, trustees, officers or other
            private persons, except that the organization
            shall be authorized and empowered to pay
            reasonable compensation for services rendered and
            to make payments and distributions in furtherance
            of the purposes set forth in the purpose clause
            hereof. No substantial part of the activities of
            the organization shall be the carrying on of
            propaganda, or otherwise attempting to influence
            legislation, and the organization shall not
            participate in, or intervene in (including the
            publishing or distribution of statements) any
            political campaign on behalf of any candidate for
            public office. Notwithstanding any other
            provision of this document, the organization shall
            not carry on any other activities not permitted to
            be carried on (a) by an organization exempt from
            federal income tax under section 501(c)(3) of the
            Internal Revenue Code, or corresponding section of
            any future federal tax code, or (b) by an
            organization, contributions to which are
            deductible under section 170(c)(2) of the Internal
            Revenue Code, or corresponding section of any
            future federal tax code.

     c.     The organization will not discriminate based on
            gender, race, religion, disability, or ethnic or
            national origin.

The Agreement stated that the amendment would be adopted in

accordance with petitioner’s internal rules of operation.      Robert

Wirengard alone signed the Agreement; the Agreement was not

signed by all directors as required by Article VI of the

Articles.
                               - 7 -

      As an attachment to a letter dated June 20, 2002,

petitioner submitted to respondent a document entitled “By-Laws

of Amend16robertwirengard (Under Review)” (hereinafter referred

to as the Bylaws).   The Bylaws provided:

                          Article I: Name

          Sec. 1. The name of this organization shall be
           Amend16robertwirengard, with its divisions and
      wholeness through the Circle of Life Ministry, United
     Health Payers, United Arrangements, United Affiliations
               and, United Bank, severally and jointly
                       Of Amend16robertwirengard
          We are an integral part of our local community,
      Hillsborough County, Florida, and the United States of
        America and our greater community, all territories,
                 nations, our Earth and our Universe.
                    Article II: Purpose and Policy
     Sec. 1. Purpose. To teach about, apply and treat each
     as each would be treated.

               *     *    *    *       *    *   *

                  Article IX: Programs/Divisions
     Sec. 1. Authorization. The Principles of “treating
     each as each would be” and freedom to choose, without
     dictate, threat or coercion, adopted by us as a whole,
     constitute the authorization for the adoption of
     Programs.
     Sec. 2. Programs. The programs shall consist of those
     issues chosen for concerted study and action.
     Sec. 3. Current Agenda and Continuing Responsibilities.
     These categories of programs are defined as follows:
     a. The Current Agenda focuses on universal, market
     priced healthcare, the absence of which in the United
     States, involves a million people in medical mishaps,
     including losses of lives, and a half million personal
     bankruptcies (impoverishments) annually, involving
     healthcare debts. The healthcare issue is eminent as a
     national issue and in local governmental issues limited
     to indigent care through a general sales tax.
     b. The Continuing Responsibilities shall consist of
     working with local government staff in its objective to
     co-pilot universal, market priced healthcare, currently
                              - 8 -

     having established a Health Insurance Study Work Group
     relative to this.
     c. The long term agenda, of which healthcare represent
     close to a third, is the elimination of poverty and
     war, or, put positively, having world wide peace
     (unfair activity, violence and terrorism being
     preempted by treating each as each would be: that each
     should have needs met and work and trade freely for
     more than what the needs of sustenance are).

     Article I, section 1, of the Bylaws provides that petitioner

is organized into five divisions: (1) Circle of Life Ministry;

(2) United Health Payers; (3) United Arrangements; (4) United

Affiliations; and (5) United Bank.    Petitioner’s Web site

provided the following description of the five divisions:

     For welfare purposes and what may be described as
     scientific and experimental models, practical
     applications and/or assistance programs, divisions of
     Amend16robertwirengard exist. These, similar to
     colleges within a university, are:

     United Arrangements of Amend16robertwirengard -
     educational, practical and real welfare application
     purposes and assuring compliance with the Multi
     Employer Welfare Arrangement of the Employee Retirement
     Income Security Act, passed by the U.S. Congress and
     under the U.S. Department of Labor. This school may
     remain in perpetuity until the end of poverty and
     systematic impoverishment.

     United Health Payers of Amend16robertwirengard (Mary
     Lasano, nurse and consultant) - experimental model for
     market-priced, universal healthcare in a non-socialist
     society. Once the success that is envisioned is
     accomplished, it is expected that this one-payer system
     will be bought out at future cost to become an
     efficient one-payer system established as a Government
     Sponsored Entity (much as the U.S. Federal Reserve
     system currently is a GSE).

     United Bank of Amend16robertwirengard (DeVara Sims,
     Tampa Police Dept./reach out, consultant and trustee) -
     a non-profit banking facility for people and businesses
                         - 9 -

to learn about and apply banking products and services;
establish IRA’s, pooling of funds, also for other
financial services such as electronic payroll
depositing for small firms, including, possibly, for
our no-profit United Health Payers deposits, accruals,
and disbursements, or employees being able to pull
partial cash funds from payrolls of their employers for
a day’s work, as well as store year to date information
on wages, tax withholdings and benefit costs; micro
loans to persons and small businesses, mainly for work
or volunteer initiatives. $8,000 already has been
donated for this endeavor.

Circle of Life Ministry of Amend16robertwirengard
(Merry Wiesenborn, director, volunteer, trustee) -
provides food and shelter for needy; transportation;
financial assistance for single mothers, particularly
those who have experienced violent, physical abuse
[cash assistance for food, shelter and education plus
transportation needs, exceeds $5,000, plus $12,000 in
loaner vehicle assets are tied up]; potential center
specifically for working with youth involving hate
crime; religious* studies, discussions and advocacy as
regards religions of Wiesenborn’s Circle of Life
Ministry and realism as opposed to or inclusive of
faiths in a deity or deities (possibly of the more
modern government preferred religions, such as of
Judeo-Christianity or Islam, etc.) Its doctrines are
based on the natural earth and universe, spirit of
people, “big boom” theory, treating others as one wants
to be treated, amending where we are wrong, repairing
where we have hurt, and civil and consensual activities
as opposed to systematic corruption that can stem from
the concentration of power in governments or from
individual violent abuses (often the physical power of
a man over a woman, rather than logic and
reasonability; or the difficult challenge of teaching
children without expeditiously inflicting pain that
causes long term and deep problems).

          *    *    *    *       *   *   *
                             - 10 -

     United Alliances of Amend16robertwirengard3 (Mauricio
     Rosas, independent citizen, activist, and trustee) -
     advocacy and reach out program to join in common
     grounds with other businesses, government, schools and
     universities, community concerned (including those
     concerned with global healthcare, environmental issues
     and community sustainability, from local “Tomorrow
     Matters”, League of Women Voters, Independent Citizens,
     ACLU, Results!, Amnesty International, Planned
     Parenthood to the Federal Reserve Bank of the U.S and
     other central banks, United Nations, International
     Monetary Fund and World Bank), and faith based
     organizations.

     In a letter to respondent dated November 30, 2001,

petitioner described the organization as a university “based on

theory”, whereas the five divisions are “subordinate colleges,

arranged to complete the fundamentals of a <micro-society’ (a

<laboratory’ and teaching facility)”.   The letter described the

separate functions of the divisions as follows:

     United Bank * * * deals with monetary aspects in our
     “mirco-society” and is about how to go about setting
     up, providing and receiving microloans, individuals
     learning and doing so (some $8,000 in cash and loan
     receivables having been donated by Robert Wirengard to
     United Bank and one microloan having been established
     with arm’s distance controls - authorization by the
     director); United Arrangements, is the legal avenue, as
     a Multi Employer Welfare Arrangement under ERISA,
     allowing us to work independently of regulations that
     regulate private sector welfare agents such as
     healthcare insurance firms (for example, as a MEWA, we
     are not required to be licensed insurance
     representatives nor to have cash reserves committed for
     coverage) it allows us, people, as individuals and
     private sector firms, for example, to work together to
     arrange for “affordable” health care, something


     3
      United Alliances of Amend16robertwirengard is presumably
the same division designated in the Bylaws as United
Affiliations.
                              - 11 -

     considered to be a welfare arrangement for employees
     and their family, our community; United Affiliations,
     is the legal channel that will allow our actual “reach-
     out” to involve all community members - from both
     private and government sectors, as well as all ranges
     of persons or associations within each - and for us to
     work together as individuals or groups for common
     goals, for example, or for affordable healthcare (a
     learning and application process, to the benefit of
     everyone); and Circle of Life Ministry, about getting
     food, shelter and healthcare for each other (again to
     the community’s welfare, and while dealing with the
     common notions of conscience or faith based charity).

The letter distinguished petitioner from founder and board member

Robert Wirengard, who “petitioned and lobbied” Federal and State

Government officials and, in December of 2000, presented a

healthcare model to the Health Care Advisory Board of

Hillsborough County.4

     In a letter dated October 20, 2003, respondent issued a

final adverse ruling with respect to petitioner’s claim for

exemption.   Respondent based the ruling on his determination that

petitioner failed to establish that: (1) Petitioner was organized

exclusively for exempt purposes; (2) petitioner was operated

exclusively for exempt purposes; (3) petitioner’s net earnings

will not inure to the benefit of private individuals or serve

private interests; and (4) petitioner was not an “action”

organization within the meaning of section 1.501(c)(3)-1(c)(3),

Income Tax Regs.


     4
      Robert Wirengard proposed that government pay the costs of
healthcare services for individuals to the extent of the average
costs for such services.
                                - 12 -

                              Discussion

     Section 501(a) exempts from Federal taxation organizations

described in section 501(c)(3).5    To qualify as an organization

described in section 501(c)(3), an organization must satisfy each

of the following four requirements:       (1) It must be organized and

operated exclusively for certain specified exempt purposes; (2)

no part of its net earnings may inure to the benefit of a private

shareholder or individual; (3) no part of its activities may

constitute intervention or participation in any political

campaign on behalf of any candidate for public office; and (4) no

substantial part of its activities may consist of political or

lobbying activities.6   See sec. 501(c)(3); Fla. Hosp. Trust Fund


     5
      SEC. 501(a). Exemption from Taxation.--An organization
described in subsection (c) * * * shall be exempt from taxation
* * *.
     6
      SEC. 501(c). List of Exempt Organizations.--The following
organizations are referred to in subsection (a):

               *    *     *     *     *      *    *

          (3) Corporations, and any community chest, fund, or
     foundation, organized and operated exclusively for
     religious, charitable, scientific, testing for public
     safety, literary, or educational purposes, or to foster
     national or international amateur sports competition (but
     only if no part of its activities involve the provision of
     athletic facilities or equipment), 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, no substantial part of the activities of which
     is carrying on propaganda, or otherwise attempting, to
     influence legislation (except as otherwise provided in
     subsection (h)), and which does not participate in, or
                                                    (continued...)
                              - 13 -

v. Commissioner, 103 T.C. 140, 145 (1994), affd. 71 F.3d 808

(11th Cir. 1996); Am. Campaign Acad. v. Commissioner, 92 T.C.

1053, 1062 (1989); IHC Health Plans, Inc. v. Commissioner, T.C.

Memo. 2001-246, affd. 325 F.3d 1188 (10th Cir. 2003).    Section

501(c)(3) provides for the following exempt purposes:    Religious,

charitable, scientific, testing for public safety, literary,

educational, and prevention of cruelty to children or animals.

Sec. 1.501(c)(3)-1(d)(1)(i), Income Tax Regs.

     It is well established that our inquiry focuses on the

reasons given by the Commissioner for denying an organization’s

application for exemption.   See Aid to Artisans, Inc. v.

Commissioner, 71 T.C. 202, 208 (1978).   Thus, in making our

declaration, we do not engage in a de novo review of the

administrative record.   See Am. Campaign Acad. v. Commissioner,

supra at 1063; Church in Boston v. Commissioner, 71 T.C. 102,

105-106 (1978); Houston Lawyer Referral Serv., Inc. v.

Commissioner, 69 T.C. 570, 573-574, 577 (1978).

     The first of the section 501(c)(3) requirements mandates

that an organization be organized exclusively for one or more of

the exempt purposes.   The exempt purposes requirement is met only

if the organization satisfies the organizational as well as the



     6
      (...continued)
     intervene in (including the publishing or distributing of
     statements), any political campaign on behalf of (or in
     opposition to) any candidate for public office.
                              - 14 -

operational test.   See sec. 1.501(c)(3)-1(a)(1), Income Tax Regs.

The organizational test is set forth in section 1.501(c)(3)-

1(b)(1)(i):

          (i) An organization is organized exclusively for
     one or more exempt purposes only if its articles of
     organization * * * as defined in subparagraph (2) of
     this paragraph:

                (a) Limit the purposes of such organization
           to one or more exempt purposes; and

                (b) Do not expressly empower the organization
           to engage, otherwise than as an insubstantial part
           of its activities, in activities which in
           themselves are not in furtherance of one or more
           exempt purposes.[1]
     [1]
       The term “articles of organization” includes an
organization’s articles of association. Sec. 1.501(c)(3)-
1(b)(2), Income Tax Regs.

Furthermore, to satisfy the organizational test, an organization

must serve a public rather than a private interest.   See sec.

1.501(c)(3)-1(d)(1)(ii), Income Tax Regs; Columbia Park &

Recreation Association, Inc. v. Commissioner, 88 T.C. 1, 13

(1987), affd. without published opinion 838 F.2d 465 (4th Cir.

1988); Retired Teachers Legal Fund, Inc. v. Commissioner, 78 T.C.

280, 286 (1982); Baltimore Regl. Joint Bd. Health & Welfare Fund

v. Commissioner, 69 T.C. 554 (1978).

     Even if an organization’s articles of organization set forth

purposes no broader than those specified in section 501(c)(3),

the organization is not organized exclusively for exempt purposes

if such articles expressly empower it to carry on (other than as
                              - 15 -

an insubstantial part of its activities) activities not in

furtherance of one or more exempt purposes.    Sec. 1.501(c)(3)-

1(b)(1)(iii), Income Tax Regs.

     In the instant case, the enumerated activities set forth in

Article III of the Articles are broad in scope and vague in

description.7   For instance, the Articles empower petitioner to

provide economic solutions to identified socioeconomic problems.

Such activities do not necessarily further an educational or

charitable purpose regardless of the fact that the Articles state

that petitioner is organized “exclusively for educational,

welfare and charitable purposes.”   See id.    This Court has held,

however, that the mere existence of power to engage in activities

other than those set out in section 501(c)(3) does not in itself

prevent an organization from meeting the organizational test.

Peoples Translation Serv./Newsfront Intl. v. Commissioner, 72

T.C. 42, 48 (1979).   A determination of whether an organization

is organized exclusively for exempt purposes is based on an

examination not only of the articles of organization but also of

other evidence in the administrative record.    See Peoples

Translation Ser./Newsfront Intl. v. Commissioner, supra; Gen.


     7
      The enumerated activities include providing “education and
advocacy, principally, of the economic and financial sciences”;
providing healthcare and transportation; testing “welfare,
healthcare and environmental models”; providing economic
solutions to identified “socio-economic and sustainability”
problems; assisting and organizing employees; and organizing
economic welfare arrangements.
                              - 16 -

Conference of the Free Church of Am. v. Commissioner, 71 T.C.

920, 927 (1979); Levy Family Tribe Found., Inc. v. Commissioner,

69 T.C. 615, 619 (1978).   Consequently, an examination of the

administrative record in the instant case for evidence that the

enumerated activities of the Articles will further an exempt

purpose is appropriate.

     We understand petitioner’s contention to be that it is a

school organized to disseminate theory to the public at-large via

petitioner’s Web site and to engage in the practical application

of such theory through its five divisions.   Petitioner includes

banking activities among such practical applications.

     As noted above, the Articles expressly empower petitioner to

identify socioeconomic problems and provide economic solutions.

Article I of the Bylaws establishes United Bank as one of

petitioner’s five organizational divisions but does not further

describe the organization or operations of United Bank.

Petitioner’s Web site stated that United Bank of

Amend16robertwirengard would provide banking products and

services to individuals and businesses.   According to the Web

site, such services include establishing IRAs, pooling funds,

electronic payroll deposits for small firms and possibly for

United Health Payers, accruals, disbursements, and providing

micro loans.   In its letter of June 20, 2002, petitioner stated

that United Bank is primarily distinguished from commercial banks
                              - 17 -

in that United Bank is neither incorporated nor a member of the

FDIC.   Rather, Robert Wirengard assumes all liability related to

United Bank.   Petitioner stated that loans were to be “of micro-

level (small) nature to help <small’ people economically to get

on their feet”.   Petitioner provided respondent with a sample

microloan note, which imposed a 6-percent interest charge.

According to petitioner, as of June 20, 2002, United Bank had

made a single loan, which resulted in default.

     Respondent contends that United Bank does not further any

exempt purpose.   Petitioner contends that United Bank would help

the poor by extending microloans and contends generally that

petitioner lacks a profit motive.

     Based upon our review of the record, we conclude that,

through United Bank of Amend16robertwirengard, petitioner is

empowered to engage in activities not in furtherance of an exempt

purpose.   The record reveals that United Bank would carry on the

activities of a commercial bank, such as extending personal and

commercial loans for a stated interest.   Petitioner’s stated

purpose of extending loans to low-income individuals and small

businesses, petitioner’s lack of profit-motive, and United Bank’s

lack of FDIC insurance do not establish that the commercial

banking activities of United Bank would further an exempt

purpose.   The activities of United Bank would constitute a

substantial part of the activities of Amend16robertwirengard.
                             - 18 -

     Based on the foregoing, petitioner does not satisfy the

organizational test of section 1.501(c)(3)-1(b)(1)(i), Income Tax

Regs., and is not organized exclusively for one or more exempt

purposes as required by section 501(c)(3).     Consequently,

petitioner is not entitled to the declaratory judgment it seeks.

We need not address respondent’s contentions that petitioner was

not operated exclusively for exempt purposes, that petitioner’s

net earnings will inure to the benefit of private individuals or

serve private interests, and that petitioner is an action

organization within the meaning of section 1.501(c)(3)-1(c)(3),

Income Tax Regs.

     To reflect the foregoing,

                                      Decision will be entered for

                                 respondent.
