Jockey Club v. Helvering

27 Citing cases

  1. Santiam Fish Game Ass'n v. Tax Com

    368 P.2d 401 (Or. 1962)   Cited 10 times

    This principle will not, however, be unduly extended to situations involving substantial and profitable outside business. See Barstow Rodeo Riding Club, Inc., 12 CCH TCM 1351, 1353 (1953); Coeur D'Alene Country Club v. Viley, supra ( 64 F Supp at 543); Jockey Club v. Helvering, 76 F.2d 597, 598 (2d Cir 1935). In Jockey Club v. Helvering, supra, a club was held to be nonexempt as a club.

  2. Rochester Liederkranz, Inc. v. United States

    456 F.2d 152 (2d Cir. 1972)   Cited 4 times

    Although there is little legislative history or judicial precedent to guide us, we think it highly doubtful that Congress intended to deny an exemption from the wagering tax under the circumstances present in this case — when participation in the drawings is limited to members and the net profits derived from the drawings are applied in furtherance of the general purposes for which the organization is entitled to an exemption under section 501. Such an interpretation of the inurement clause in section 4421(2)(B) is supported by the numerous decisions and rulings construing the comparable clause contained in section 501(c)(7), which denies an exemption to a club if any "part of the net earnings of which inures to the benefit of any private shareholder." Two decisions in this circuit are particularly instructive: West Side Tennis Club v. Commissioner of Internal Revenue, 111 F.2d 6 (2d Cir.), cert. denied, 311 U.S. 674, 61 S.Ct. 40, 85 L.Ed. 434 (1940), and Jockey Club v. Helvering, 76 F.2d 597 (2d Cir. 1935). In West Side Tennis Club we held that the substantial income which the club derived from conducting annual national championship tennis matches inured to the benefit of its members.

  3. National Mah Jongg League, Inc. v. United States

    75 F. Supp. 769 (S.D.N.Y. 1947)   Cited 1 times

    111 F.2d at page 8. In Jockey Club v. Helvering, 2 Cir., 76 F.2d 597, referring to subdivision 9, the court says — "This does not of course mean that a club may on no occasion make a profit without losing its exemption, but it does mean that the returns from transactions with outsiders, taken by and large, shall be no more than a reimbursement of their cost to the club; shall not be a source of income. If it turns out upon computation that they are such a source over a substantial enough period to justify the conclusion that this was deliberate * * * the club is making earnings which `inure to the benefit' of the members."

  4. Murphy v. Concordia Publishing House

    155 S.W.2d 122 (Mo. 1941)   Cited 17 times
    In Murphy v. Concordia Publishing House, 348 Mo. 753, 155 S.W.2d 122, 136 A.L.R. 1461 and note, and Northeast Osteopathic Hospital v. Keitel, 355 Mo. 740, 197 S.W.2d 970 (also cited), exemption was denied because charter provisions included non-exempt purposes.

    2 Cooley on Taxation (4 Ed.), p. 1403; State ex rel. Y.M.C.A. v. Gehner, 320 Mo. 1172, 11 S.W.2d 30; St. Louis Y.M.C.A. v. Gehner, 329 Mo. 1007, 47 S.W.2d 776; Wyman v. St. Louis, 17 Mo. 335. (4) The Unemployment Compensation Law is remedial legislation and should be liberally construed. Sec. 2, Laws 1937, p. 574; 59 C.J. 1106, sec. 657; Endlich, Interpretation of Statutes, p. 142, sec. 108; Hudgins v. Mooresville Consol. School District, 312 Mo. 1, 278 S.W. 769; State ex rel. Laundry, Inc., v. Pub. Serv. Comm., 327 Mo. 93, 34 S.W.2d 37. (5) The services performed for respondent constitute employment as defined in the Unemployment Compensation Law. Par. 7, subsection 3 (i) (6), Laws 1937, p. 577; 26 U.S.C.A., 101 (6); Trinidad v. Sagrada Orden de Predicadores, 263 U.S. 578, 68 L.Ed. 458, 44 Sup. Ct. 204; 26 U.S.C.A., 101 (14); Sand Springs Ry. Co. v. Commr. of Internal Revenue, 21 B.T.A. 1291; Jockey Club v. Helvering, 30 B.T.A. 670, affirmed 76 F.2d 597; Herbert E. Fales, 9 B.T.A. 828; J. Noah H. Slee, 15 B.T.A. 710, affirmed 42 F.2d 184; Matter of de Peyster, 210 N.Y. 216; Matter of Corporation of Yaddo, 216 N.Y. App. Div. 1, 214 N.Y.S. 523; Mohawk Mills Assn., Inc. v. Miller, 22 N.Y.S. 2d 993; Y.W.C.A. v. Baumann, 130 S.W.2d 499, 344 Mo. 898; Fitterer v. Crawford, 157 Mo. 51, 57 S.W. 532; St. Louis No. 9, B.P.O.E. v. Koeln, 262 Mo. 444, 171 S.W. 329; Park Floral Co. v. Industrial Comm., 91 P.2d 492, 104 Colo. 350. (6) Net earnings of respondent corporation inure to the benefit of a private corporate shareholder. People v. McAdams, 82 Ill. 356; Medical College of Georgia v. Rushing, 57 S.E. 1083. 1 Ga. App. 468; Strauss v. Marlboro County General Hospital, 194 S.E. 65, 185 S.C. 425; 33 Words and Phrases (Perm. Ed.), p. 678.

  5. Knights of Columbus Council No. 3660 v. U.S.

    783 F.2d 69 (7th Cir. 1986)   Cited 7 times

    Where a section 501 exempt organization raises substantial revenue by engaging in profitable transactions with the public over a long period of time, inurement is established under § 4421(2)(B) even though the earnings so derived are not distributed directly to the membership. Rochester Liederkranz, Inc. v. United States, 456 F.2d 152, 155-56 (2d Cir. 1972), citing Jockey Club v. Helvering, 76 F.2d 597, 598 (2d Cir. 1935). However, where participation in the revenue-raising activity is limited to members of the tax exempt organization, the financial resources generated by the activity and used to support the organization "are merely shifted between members of such a group, and no tax consequences attach to that shifting."

  6. Pittsburgh Press Club v. United States

    536 F.2d 572 (3d Cir. 1976)   Cited 10 times

    We review the 5% figure, however, as the I.R.S. position on the appropriate level and not necessarily the one to be adopted by the district court in this case. See United States v. Fort Worth Club, 5 Cir., 345 F.2d 52, 57, modified, 348 F.2d 891 (5th Cir. 1965); West Side Tennis Club v. Commissioner, 111 F.2d 6, 8 (2d Cir. 1940); Jockey Club v. Helvering, 76 F.2d 597, 598 (2d Cir. 1935). The Governing contends hat $10,000.

  7. U.S. v. Fort Worth Club of Fort Worth, Texas

    345 F.2d 52 (5th Cir. 1965)   Cited 9 times
    Acknowledging that "exemption is a broad brush; the club that loses its exemption becomes taxable on income from all sources, including dues, assessments, and membership fees"

    The Fort Worth Club cannot deny that it has derived substantial and recurrent profit from a business altogether unrelated to its activities as a social club. Aviation Club of Utah v. Commissioner, 10 Cir. 1947, 162 F.2d 984, cert. den'd 332 U.S. 837, 68 S.Ct. 220, 92 L.Ed. 409; West Side Tennis Club v. Commissioner, 2 Cir. 1940, 111 F.2d 6, 130 A.L.R. 103, cert. den'd 311 U.S. 674, 61 S.Ct. 40, 85 L. Ed. 434; Jockey Club v. Helvering, 2 Cir. 1935, 76 F.2d 597; Spokane Commercial Travelers v. Squire, D.C.Wash. 1954, 126 F. Supp. 424; Polish Army Veterans Post 147 v. Commissioner, 1955, 24 T.C. 891, remanded on other grounds, 236 F.2d 509; Juniper Hunting Club v. Commissioner, 1933, 28 B.T.A. 525. An exemption will not be allowed "in situations involving substantial and profitable `outside business' since organizations of this general character serve but a limited general purpose.

  8. Chattanooga Automobile Club v. Commissioner

    182 F.2d 551 (6th Cir. 1950)   Cited 24 times
    Denying tax exempt status to automobile clubs

    This was most substantial, for its net overall profit for the period was only $2,286.11. Without the profit from these transactions with outsiders, the club would have been required either to curtail its services, or to increase the dues charged its members. In Jockey Club v. Helvering, 2 Cir., 76 F.2d 597, 598, it was held that a jockey club which maintained an experimental horse-breeding station and bureau, but was organized chiefly for the protection and enjoyment of the sport of kings and commoners, was not a "scientific corporation" exempt from income tax. Discussing the exemption of clubs whose earnings do not inure to the benefit of members, the court pointed out that while on occasion a club may make a profit without losing its exemption it may not, without doing so, receive from transactions with outsiders more than reimbursement of their cost to the club. The opinion stated: "If it turns out upon computation that they [transactions with outsiders] are such a source over a substantial enough period to justify the conclusion that this is deliberate, we agree with the Board that the club is making earnings which `inure to the benefit' of the members, though they are not distributed.

  9. Aviation Club of Utah v. C.I.R

    162 F.2d 984 (10th Cir. 1947)   Cited 16 times

    In holding that the revenue derived from the operation of the Club for the taxable years 1942 and 1943 was taxable as corporate income, the Tax Court cited and relied upon those related cases which hold in effect that where a Club of this kind, otherwise exempt under Section 101(9), engages in extra activities amounting to a substantial and continuing business for profit, the revenue from which inures to the benefit of the members, although not distributed, it loses its exempt status. West Side Tennis Club v. Commissioner, 111 F.2d 6, 130 A.L.R. 103, certiorari denied 311 U.S. 674, 61 S.Ct. 40, 85 L.Ed. 434; Jockey Club v. Commissioner, 2 Cir., 76 F.2d 597. Those cases draw a clear distinction between clubs which operate a substantial and continuing business, the revenue from which inures either directly or indirectly to the benefit of the members in the nature of permanent club improvements, and those which operate a business venture for profit, yet such profits do not and cannot inure to the benefit of the members, but support and maintain a wholly exempt organization, Trinidad v. Sagrada Orden, etc., 263 U.S. 578, 44 S.Ct. 204, 68 L.Ed. 458; Roche's Beach, Inc. v. Commissioner, 2 Cir., 96 F.2d 776; Debs Memorial Radio Fund v. Commissioner, 2 Cir., 148 F.2d 948, or those cases where the revenue is derived from isolated transactions, such as a sale of a part of its property, Santee Club v. White, 1 Cir., 87 F.2d 5; Koon Kreek Klub v. Thomas, 5 Cir., 108 F.2d 616.

  10. American Kennel Club, Inc. v. Hoey

    148 F.2d 920 (2d Cir. 1945)

    Yet no one would say that, even if today mathematicians and physicists, for their purposes, still studied what went on in gambling houses, such institutions were organized and operated for purposes "exclusively * * * scientific." The instant case cannot be distinguished — as was the Bohemian case, supra — from our decision in Jockey Club v. Helvering, 2 Cir., 76 F.2d 597. For recent discussions, see, e.g., Kaufmann, Methodology of The Social Sciences (1944); Neurath, Foundations of The Social Sciences, in International Encyclopedia of Unified Science, Vol. II, No. 1 (1944); Cohen and Nagel, Logic and Scientific Method (1936) Ch. XVII.