Supreme Court Update

Date01 July 2020
Published date01 July 2020
Bruce R. Hopkins’ Nonpr ofit Counsel DOI:10.10 02/n pc
for several days. This includes a “combination of
educational, social, and spiritual activities advancing
the family’s core values of love, unity, and progress.”
The IRS declined to recognize this organization as a
tax-exempt charitable one, finding nonexempt pur-
poses, private inurement, and private benefit (Priv.
Ltr. Rul. 202016022).
A membership organization of independent opera-
tors in an industry was formed to, among various
objectives, provide education and promote policy to
benefit this industry at the local, state, and national
levels; secure and preserve a “viable livelihood” for
present and future generations; support the finan-
cial, environmental, cultural, and historical interests
of the industry; conduct meetings; and implement
educational programs. It operates a political action
committee. The IRS concluded that this organization
has substantial nonexempt purposes and activities
precluding its exemption as a charitable and educa-
tional entity (Priv. Ltr. Rul. 202016025, and, likewise,
Priv. Ltr. Rul. 202016027).
A nonprofit organization, with a membership of
independent food truck owners and operators,
applied for recognition of exemption as a charitable
and educational entity. The mission of this organi-
zation is to help its members grow their businesses.
The IRS issued an adverse ruling, holding that a
substantial portion of the organization’s activities is
furtherance of the common business interests of its
members (Priv. Ltr. Rul. 202017034). [4.5(a)]
The US Supreme Court, on May 6, heard arguments in
a case regarding the scope of religious or moral excep-
tions to the contraceptive mandate that is part of the
Patient Protection and Affordable Care Act (Little Sis-
ters of the Poor v. Pennsylvania). The Court, on May
12, heard arguments in two cases that could lead
to expansion of the ministerial exception (see the
March 2012 issue) (Our Lady of Guadalupe School v.
Morrisey-Berru; St. James School v. Darryl Biel).
The Court, on April 27, held that states cannot cop-
yright their entire state code, including annotations
(Georgia v. The Court, on April
27, held that the federal government is required to
pay insurance companies for the losses they incurred
(approximately $12 billion) in participating in health
care exchanges established in accordance with the
Affordable Care Act (Maine Community Health
Options v. US; Moda Health Plan, Inc. v. US; Land of
Lincoln Mutual Health Ins. Co. v. US).
Readers will recall the lawsuit seeking to enjoin
enforcement of an IRS notice that identified a trans-
action as a transaction of interest, principally on the
ground that the notice was promulgated in violation
of the Administrative Procedure Act (CIC Services,
LLC v. United States). Both the district court and
the US Court of Appeals for the Sixth Circuit held
that the complaint is barred by the Anti-Injunction
Act (the latter holding summarized in the August
2019 issue). The Court, on May 4, agreed to hear
the case.
The US Tax Court, on March 24, issued a stipulated
opinion enabling the Panera Bread Foundation to retain
its tax-exempt status (Panera Bread Foundation, Inc. v.
Commissioner). The subject of this case is operation of
the Panera Cares Cafes (petition summarized in the June
2019 issue). The foundation represented to the court
that the cafes have ceased operations and will not be
resumed. [4.9(a), 7.2, 8.1, 24.2(a)]
Each article in the newsletter on a tax-exempt organizations law topic ends with a citation to the appropriate chapter(s) or
subchapter(s) in Hopkins, The Law of Tax-Exempt Organizations, Twelfth Edition (Wiley, 2019, 2020 supplement). This is done to
provide ready access to additional and background information concerning these articles. For example, underlying information con-
cerning the first article in this issue is available in Chapter 25 § 5 of the book; thus, the citation is referenced as [25.5]. Likewise,
each article in the newsletter on a charitable giving law topic ends with a citation to the appropriate chapter(s) or subchapter(s) in
Hopkins, The Tax Law of Charitable Giving, Fifth Edition (Wiley, 2014, 2020 cumulative supplement). For example, underlying infor-
mation concerning the fourth article in this issue is available in Chapter 9 § 7 of the book; thus, the citation is referenced as [9.7].
This newsletter is a stand-alone publication. An inventory of articles in the newsletter since its inception in 1983, and a subject
matter index, as well as an index of the court opinions, IRS revenue rulings and procedures, IRS technical advice memoranda, and
IRS private letter rulings discussed in the newsletter, are available at For those who have the books,
the newsletter also provides monthly updates. Both books are annually supplemented. Questions concerning nonprofit law devel-
opments in general may be sent to Also, a comprehensive summary of nonprofit law is
available in the Bruce R. Hopkins Nonprofit Law Library, an e-book published by Wiley. Other law resources are referenced at www. Follow BRHopkins_NPLaw on Twitter.
The newsletter has a dedicated website. Please visit
Quote of the Month: This from the government’s reply
brief, filed on May 7, in the Mayo Clinic case (see the
October 2019 and June 2020 issues): Mayo’s “real com-
plaint is that Congress opted to extend the limited tax
exemption in § 514(c)(9)(C) to § 170(b)(1)(A)(ii) only and
not to § 170(b)(1)(A)(iii).”

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