United States v. American College of Physicians (475 U.S. 834)
U.S. Supreme Court · decided April 22, 1986 · Supreme Court Database (Spaeth)
- Citation
- 475 U.S. 834 · 106 S. Ct. 1591
- Decided
- April 22, 1986
- Term
- October Term 1985
- Vote
- 9–0
- Majority author
- Justice Marshall
- Issue area
- Federal Taxation
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice Marshall delivered the opinion of the Court. 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, must 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. The purposes of the College, as stated in its articles of incorporation, are to maintain high standards in medical education and medical practice; to encourage research, especially in clinical medicine; and to foster measures for the prevention of disease and for the improvement of public health. App. 16a. The principal facts were stipulated at trial. In furtherance of its exempt purposes, respondent publishes The Annals of Internal Medicine (Annals), a highly regarded monthly medical journal containing scholarly articles relevant to the practice of internal medicine. Each issue of Annals contains advertisements for pharmaceuticals, medical supplies, and equipment useful in the practice of internal medicine, as well as notices of positions available in that field.…
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