                         T.C. Memo. 1997-220



                       UNITED STATES TAX COURT



             OLIVER FAMILY FOUNDATION, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8346-96X.                        Filed May 8, 1997.



     William J. Tully (an officer), for petitioner.

     Kirk M. Paxson and Irene S. Carroll, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION

     VASQUEZ, Judge:    Petitioner, pursuant to section 7428,1 asks

for a declaratory judgment that it is entitled to an exemption

from Federal income taxes under section 501(c)(3).    Respondent

filed a motion to dismiss for lack of jurisdiction upon the

     1
        All section references are to the Internal Revenue Code
in effect for the years in issue. All Rule references are to the
Tax Court Rules of Practice and Procedure.
                                 - 2 -

ground that the petition for declaratory judgment was not filed

by a person authorized to institute suit on behalf of petitioner.

     The sole issue for decision is whether Dr. William J. Tully

(Dr. Tully) was a person authorized to institute suit on behalf

of petitioner.

                         FINDINGS OF FACT

     A hearing was held on respondent's motion to dismiss for

lack of jurisdiction.   At that hearing, the parties presented

witnesses, submitted exhibits, and argued the motion.    Subsequent

to the hearing, both parties submitted briefs.

     On February 1, 1996, respondent issued a final adverse

determination as to the exempt status under section 501(c)(3) of

the Oliver Family Foundation (petitioner or the foundation).      On

May 2, 1996, Dr. Tully, purporting to act on behalf of

petitioner, timely filed a petition for declaratory judgment

(petition).2   Dr. Tully signed the petition as vice president of

the foundation.

     At the time the petition was filed, petitioner's principal

place of business was in Borrego Springs, California.

Petitioner was formed with the intent to provide a professorship

and several scholarships to Oberlin College.    Dr. William Shelby

Oliver (Dr. Oliver) was the president and a director of the

foundation when it was formed.    Dr. Oliver hired Dr. Tully to

     2
        The petition was incorrectly entitled “Petition for
Redetermination of Deficiency”.
                                - 3 -

organize and to acquire exempt organization status for

petitioner.    Dr. Oliver paid Dr. Tully $10,000 for this service.

On December 14, 1993, Dr. Tully filed petitioner's articles of

incorporation (articles) with the State of Nevada's secretary of

state.   Petitioner was established as a Nevada nonprofit

corporation.   Dr. Tully was one of the original five directors of

petitioner.    For each of the years 1994 through 1996, petitioner

filed required documents with the Nevada secretary of state

listing its directors and officers.     On each of the documents,

Dr. Tully signed as petitioner's vice president.

     Dr. Tully filed the necessary forms seeking to obtain

section 501(c)(3) exempt organization status for petitioner.     The

Internal Revenue Service (IRS) did not grant petitioner's request

for exempt organization status.

     As petitioner failed to receive exempt organization status,

Dr. Oliver asked Dr. Tully to return his $10,000 fee.     As

payment, Dr. Oliver received a note from Dr. Tully in the amount

of $10,000.    To secure the note, Dr. Tully also executed a grant

deed in favor of Dr. Oliver for a house in Michigan.

     When the foundation was originally formed, each of the

directors prepared and signed undated resignation letters that

were kept with the corporate books.     In October 1995, Dr. Oliver

dated Dr. Tully's resignation letter October 13, 1995, and

forwarded it to the IRS.   Also in October 1995, Dr. Tully sent
                               - 4 -

the foundation his conditional letter of resignation as a

director of the foundation.

     On December 15, 1995, petitioner's board of directors voted

to transfer ownership of petitioner to Dr. Tully.

                              OPINION

     Respondent, pursuant to Rule 53, has moved to dismiss this

case for lack of jurisdiction on the ground that the petition for

declaratory judgment was filed by a person not authorized to

institute suit on behalf of petitioner.    Respondent contends the

following:   On May 2, 1996, Dr. Tully filed a petition on behalf

of petitioner and signed the petition as its vice president; Dr.

Tully had resigned from the board of directors and as a trustee

of petitioner as of October 13, 1995; and, therefore, Dr. Tully

is not authorized to institute suit on behalf of petitioner.

     Petitioner answers the following:    Dr. Tully has been an

officer and director of petitioner at all times since its

inception; in October 1995, Dr. Tully offered to resign from his

position as a director of petitioner if petitioner was approved

as a tax-exempt organization by the IRS; Dr. Tully submitted a

conditional letter of resignation to petitioner's board of

directors but never resigned; on or about December 15, 1995, all

rights in petitioner were transferred to Dr. Tully; and,

therefore, Dr. Tully is a proper person to bring this action.

The burden of proof is upon petitioner to establish that it meets

the jurisdictional requirements of section 7428.    Rule 217(c);
                              - 5 -

American New Covenant Church v. Commissioner, 74 T.C. 293, 304

(1980).

     We must decide whether this Court has jurisdiction to make a

determination with respect to petitioner's status.   Section

7428(a) confers jurisdiction on this Court to “make a

declaration” with respect to the “initial qualification” of an

organization as an organization described in section 501(c)(3)

which is exempt from tax under section 501(a).   Subsection (b) of

section 7428 provides certain limitations on our jurisdiction for

declaratory judgments relating to section 501(c)(3) status, as

follows:

     SEC. 7428(b). Limitations.--

          (1) Petitioner.--A pleading may be filed under this
     section only by the organization the qualification or
     classification of which is at issue.

Thus, under section 7428(b), this Court's jurisdiction is limited

to actions filed by the organization, the qualification or

classification of which is at issue.   Petitioner in this case,

the Oliver Family Foundation, is the appropriate petitioner.

However, if as respondent contends, Dr. Tully was not authorized

to file a petition on behalf of petitioner, section 7428(b)(1)

and Rules 60(a)(2) and 210(b)(11) would require this Court to

dismiss the instant case.

     The record indicates that at the time the instant petition

was filed, Dr. Tully was the vice president of petitioner.     For

each year petitioner was in existence, Nevada law required a list
                                 - 6 -

of directors and officers to be filed with the Nevada secretary

of state; these lists were signed by Dr. Tully as vice president

every year that they were filed, which included the year in which

the petition for this case was filed.    The purported resignation

letters of Dr. Tully, if valid, involved his position only as a

director and not as an officer.    The evidence shows that at the

time he signed the instant petition Dr. Tully was an authorized

officer of petitioner.   Therefore, we find that Dr. Tully was a

person authorized to institute suit on behalf of petitioner.   See

Rule 24(b).

     To reflect the foregoing,

                                                  An order denying

                                          respondent's motion will

                                          be issued.
