St. John’s Orphanage, Inc. v. United States
United States Court of Claims
16 Cl. Ct. 299 (1989)
- Written by Daniel Clark, JD
Facts
The organization that later became St. John’s Orphanage, Inc. (St. John) (plaintiff) founded a nonprofit orphanage in 1905. In 1951, St. John ceased operating as an orphanage and shifted its attention to funding child-welfare projects. From 1951 to 1967, St. John sold its orphanage-related assets and directed the proceeds, along with money from donor bequests and St. John’s remaining real estate properties, toward interest- and dividend-paying investment vehicles. The bulk of St. John’s income came from dividends and interest from those investments. St. John filed an application with the Internal Revenue Service (IRS) (defendant) seeking classification as both a tax-exempt organization under § 501(c)(3) of the Internal Revenue Code (code) and a nonprivate foundation under § 509(a)(1) of the code. The IRS determined that St. John was a tax-exempt organization under § 501(c)(3) but not a nonprivate foundation under § 509(a)(1). St. John filed an action in the United States Court of Claims seeking a declaratory judgment that it was a nonprivate foundation under § 509(a)(1).
Rule of Law
Issue
Holding and Reasoning (Futey, J.)
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