American Medical Association, Cross-Appellant v. United States of America, Cross-Appellee

CUDAHY, Circuit Judge.

This case involves the allocation of income and expenses between a charitable organization’s tax-exempt activities and its taxable business endeavors for purposes of computing the charity’s “unrelated business income tax” under 26 U.S.C. sections 511 to 513. The American Medical Association (the “AMA”), a tax-exempt charitable organization, filed suit in the Northern District of Illinois seeking a refund for the tax years 1975 through 1978. The AMA argued that the Internal Revenue Service (the “IRS”) had improperly calculated its income from the non-exempt unrelated…