Maryland Country Club, Incorporated v. United States

WINTER, Circuit Judge:

Former § 4241 of the Internal Revenue Code of 1954, 1 imposed a twenty percent excise tax on dues or membership fees and initiation fees paid to any social, athletic or sporting club. Former § 4243, 2 however, exempted such dues and fees from the tax if they were paid for capital improvements, or furnishings or fixtures required as a result of capital construction, and used' for such purposes within three years. A regulation, 26 C.F.R. § 49.4243 — 2(b)(iii), provided that even if otherwise exempt under § 4243, such dues and fees would not be exempt “unless they are…