Federation Pharmacy Services, Inc. v. Commissioner
United States Tax Court
Petitioner is a nonprofit corporation that operates a pharmacy, selling drugs at cost to elderly and handicapped persons. Petitioner has no commitment to use excess receipts to provide below, or no, cost drugs to the elderly or handicapped.
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Petitioner is a nonprofit corporation that operates a pharmacy, selling drugs at cost to elderly and handicapped persons. Petitioner has no commitment to use excess receipts to provide below, or no, cost drugs to the elderly or handicapped. Held: Petitioner operates a pharmacy primarily for commercial purposes as it sells drugs at a discount determined by its cost, with no provision for sales below cost to the elderly and handicapped, in competition with profitmaking drug stores. Fact that product sold by petitioner is helpful to health does not entitle it to an automatic sec. 501(c)(3),…
1Dissent
Tietjens, </.,
dissenting: I respectfully dissent. The issue, as I understand it, is whether petitioner is operated exclusively for charitable purposes. The majority opinion fails entirely to analyze and apply the applicable law on this point, but instead gives a cursory opinion on a difficult factual issue. After carefully considering section 501, the regulations thereunder, cases thereon, and the facts of this case, I feel obliged to hold for petitioner.
Section 501(a) exempts from ncome tax, among others, organizations described in section 501(c)(3). Section 501(c)(3) provides in pertinent…
2Cases cited31 opinions
- Simon v. Eastern Kentucky Welfare Rights OrganizationSupreme Court of the United States · 1976
- Better Business Bureau of Washington, D. C., Inc. v. United StatesSupreme Court of the United States · 1946
- Trinidad v. Sagrada Orden De Predicadores De La Provincia Del Santisimo Rosario De FilipinasSupreme Court of the United States · 1924
- B.S.W. Group, Inc. v. CommissionerUnited States Tax Court · 1978
- Eastern Kentucky Welfare Rights Organization v. William E. Simon, Secretary of the TreasuryCourt of Appeals for the D.C. Circuit · 1974
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