Associated Hospital Services, Inc. v. Commissioner
United States Tax Court
Petitioner is an organization controlled jointly by four tax-exempt hospitals. Its sole function is to furnish laundry services to its member hospitals.
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Petitioner is an organization controlled jointly by four tax-exempt hospitals. Its sole function is to furnish laundry services to its member hospitals. Held, under the reenactment doctrine applicable to regulations and interpretations long continued without substantial change applying to unamended or reenacted statutes, and deemed to have congressional approval, petitioner is a feeder organization under sec. 502, I.R.C. 1954, and sec. 1.502-1(b), Income Tax Regs., and is therefore not exempt under sec. 501(c)(3). National Muffler Dealers Assn., Inc. v. United States, 440 U.S. 472 (1979);…
1DissentWilbur, J.
I must respectfully dissent from the majority’s holding that the petitioner is a feeder organization under section 502 and therefore not exempt under section 501(a). In the Revenue Act of 1950, Congress added section 502, along with the tax on unrelated business income provided by sections 511 to 513.1 The Treasury Department described their purpose as follows:
Under the recommendation, if such activities are conducted by the exempt organization itself, the exemption of the organization would not be disturbed, but such business income would be segregated and subjected to tax. If a separate…
2Cases cited9 opinions
- United Telecommunications, Inc. (Formerly United Utilities, Incorporated) v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1978
- United Telecommunications, Inc. v. CommissionerUnited States Tax Court · 1975
- United Telecommunications, Inc. v. CommissionerUnited States Tax Court · 1977
- Northern California Central Services, Inc. v. United StatesUnited States Court of Claims · 1979
- Hospital Bureau of Standards & Supplies, Inc. v. United StatesUnited States Court of Claims · 1958
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