must be held to be the accumulation of $ 10,000,000.00. When that goal is reached, then something worthwhile can be undertaken. As indicated, it is apparent that the purposes and objectives of the trust in the first instance were and continue to be laudable, but under the circumstances the substantial income cannot be held to be exempt from taxation. The first question therefore is answered in the affirmative.
II -- Having held that the taxpayer has unreasonably accumulated income within the meaning of Section 504, the question still for decision is whether the taxpayer is entitled to exemption under Section 501 as an organization described in Section 501(c)(4) of the Internal Revenue Code. The government contends that in order to qualify for exemption under Section 501 as an organization described in Section 501(c)(4), the taxpayer must prove (1) that it is a civic organization, (2) that it is not organized for profit, and (3) that it is operated exclusively for the promotion of social welfare. United States v. Pickwick Electric Membership Corp., 158 F.2d 272 (C.A.6th, 1946); Debs Memorial Radio Fund v. Commissioner, 148 F.2d 948 (C.A.2d, 1945). The taxpayer may be exempt if it is an organization listed under Section 501(c) (4). The government admits that the taxpayer is not organized for profit but contends that the taxpayer is neither a civic organization nor is it operated exclusively for the promotion of civic welfare. All three conditions must prevail to being the taxpayer within the cited section. Several court decisions attempt to define or describe a civic organization or league. No doubt the most authoritative decision is United States v. Pickwick Electric Membership Corp., supra. The court there, 158 F.2d at page 276, said, "Civic' is defined as pertaining to a city or a citizen; relating to the community. A civic league or organization embodies the idea of citizens of a community cooperating to promote the common good and general welfare of people of the community.' In the cited case the corporation was organized to provide electricity for communities, rural districts, schools and towns. In Debs Memorial Radio Fund v. Commissioner of Int. Rev., supra, the corporation was organized to conduct a free public radio forum for dissemination of liberal and progressive social views, and the court held that it was a civic organization within the meaning of the applicable section then enforced. A similar principle was pronounced by the court in Hanover Imp. Soc. v. Gagne, 92 F.2d 888 (C.A.1st, 1937), where the association in question operated a motion picture theatre and used the profits therefrom for village improvements.
The government in conceding that the taxpayer is not organized for profit and that it is a charitable organization does not, per se, concede that it is a civic organization. The minutes of the resolutions and actions taken by the Trustees over the years indicate that there can be no finding that taxpayer is a civic organization. Mr. Mack, during his lifetime, borrowed large sums from the trust. The trust made loans to Mr. Mack's daughter. The trust loaned money to a corporation in which the donor had a substantial stock interest. No loans were made to any other persons than to the donor or his daughter or to corporations in which the donor was interested. One can concede that the purpose of the trust generally is charitable but at the same time the trust and its management has been directed towards the perpetuation of E. H. Mack's name as a beneficent individual in the Erie community, and in order to promote that idea, it seems apparent that the donor desired that a $ 10,000,000.00 trust be accumulated. Mr. Mack desired to leave a magnificent memorial in the way of a charity. However, he did not formulate any specific program nor have the trustees of the taxpayer formulated any such program. They are frank to state that none can be formulated until the $ 10,000,000.00 goal is reached. Under the circumstances, the taxpayer cannot be held to be exempt under Section 501(c)(4) as a civic organization. This court, by this decision, does not mean to cast any aspersion upon the objectives or management of the Erie Endowment. It is simply a decision going solely to the tax problem. The defendant is entitled to judgment and it will be so ordered.
This opinion is regarded as comprising the findings of fact and conclusions of law.
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