United States v. American Bar Endowment et al. (477 U.S. 105)
U.S. Supreme Court · decided June 23, 1986 · Supreme Court Database (Spaeth)
- Citation
- 477 U.S. 105 · 106 S. Ct. 2426
- Decided
- June 23, 1986
- Term
- October Term 1985
- Vote
- 6–1
- Majority author
- Justice Marshall
- Issue area
- Federal Taxation
- Disposition
- Reversed and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice Marshall delivered the opinion of the Court. The first issue in this case is whether income that a tax-exempt charitable organization derives from offering group insurance to its members constitutes “unrelated business income” subject to tax under §§511 through 513 of the Internal Revenue Code (Code), 26 U. S. C. §§511-513. The second issue is whether the organization’s members may claim a charitable deduction for the portion of their premium payments that exceeds the actual cost to the organization of providing insurance. I Respondent American Bar Endowment (ABE) is a corporation exempt from taxation under § 501(c)(3) of the Code, which, with certain exceptions not relevant here, exempts organizations “organized and operated exclusively for . . . charitable ... or educational purposes.” ABE’s primary purposes are to advance legal research and to promote the administration of justice, and it furthers these goals primarily through the distribution of grants to other charitable and educational groups. All members of the American Bar Association (ABA) are automatically members of ABE. The ABA is exempt from taxation as a “business league” under § 501(c)(6). ABE raises money for its charitable work by providing group insurance policies, underwritten by major insurance companies, to its members. Approximately 20% of ABE’s members participate in the group insurance program,…
Excerpt of a 50,883-character opinion. The full text and citation network load in the interactive viewer above.