United States v. American College of Physicians

A tax-exempt organization must pay tax on income that it earns by carrying on a business not “substantially related” to the purposes for which the organization has received its exemption from federal taxation. The question before-this Court is whether respondent, a tax-exempt organization, *836must pay tax on the profits it earns by selling commercial advertising space in its professional journal, The Annals of Internal Medicine.

I

Respondent, the American College of Physicians, is an organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code.1 The purposes of the College, as…