Detailed Answer
(d) The requirement is to determine the correct statement
regarding qualification as an exempt organization. To
qualify as an exempt organization, the applicant must not be a
private foundation organized and operated exclusively to influence
legislation pertaining to protection of the environment.
Exempt status is specifically denied to organizations if a substantial
part of their activities consists of ’carrying on propaganda, or
otherwise attempting, to influence legislation, if expenditures
exceed certain amounts. Answer (a) is incorrect because an exempt
organization cannot be organized for the primary purpose
of carrying on a business for profit. Answer (b) is incorrect because
an organization must be one of those classes upon which
exemption is specifically conferred by the Internal Revenue
Code. Answer (c) is incorrect because a social club organized for
recreation will qualify for exemption if substantially all of the
activities of the club are for such purposes and none of the profits
inure to the benefit of any shareholder.