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Supreme Court of the United States
January 7, 1974, Argued ; May 15, 1974, Decided
[*726] [***503] [****7] [**2041] MR. JUSTICE POWELL delivered the opinion of the Court.
This case and Commissioner v. "Americans United" Inc., post, p. 752, involve the application of the Anti-Injunction [*727] Act, § 7421 (a) of the Internal Revenue [***504] Code of 1954 (the Code), 26 U. S. C. § 7421 (a), to the ruling-letter program of the Internal Revenue Service (the Service) for organizations claiming tax-exempt status under Code § 501 (c)(3), 26 U. S. C. § 501 (c)(3). The question presented is whether, prior to the assessment and collection of any tax, a court may enjoin the Service from revoking a ruling letter declaring that petitioner qualifies for tax-exempt status and from withdrawing advance assurance to donors that contributions to petitioner will constitute charitable deductions under Code § 170 (c)(2), 26 U. S. C. § 170 (c)(2). We hold that it may not.
Section 501 (a) of the Code exempts from federal income taxes organizations described in § 501 (c)(3). The latter provision encompasses:
"Corporations, and any community chest, fund, or foundation, organized and [****8] operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office."
Section 501 (c)(3) organizations are also exempt from federal social security (FICA) taxes by virtue of Code § 3121 (b)(8)(B), 26 U. S. C. § 3121 (b)(8)(B), and from federal unemployment (FUTA) taxes by virtue of § 3306 (c)(8), 26 U. S. C. § 3306 (c)(8). Donations [*728] to § 501 (c)(3) organizations are tax deductible under § 170 (c)(2). 1
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416 U.S. 725 *; 94 S. Ct. 2038 **; 40 L. Ed. 2d 496 ***; 1974 U.S. LEXIS 9 ****; 74-1 U.S. Tax Cas. (CCH) P9438; 33 A.F.T.R.2d (RIA) 1279
BOB JONES UNIVERSITY v. SIMON, SECRETARY OF THE TREASURY, ET AL.
Prior History: [****1] CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT.
Disposition: 472 F.2d 903 and 476 F.2d 259, affirmed.
organizations, taxes, injunction, contributions, donors, tax collection, collection, revocation, tax-exempt, pre-enforcement, circumstances, withdrawing, irreparable injury, Anti-Injunction Act, assurance, revoking, literal, refund, restrain, charitable deduction, federal income tax, district court, tax liability, income tax, deductible, enjoin
Tax Law, Federal Taxpayer Groups, Exempt Organizations, Charitable, Religious & Scientific Organizations, Conditions & Restrictions, Tax Credits & Liabilities, Estimates & Withholding, Definitions, Credits, Overassessments & Refunds, Civil Actions for Refunds, Governments, Courts, Courts of Claims, Federal Income Tax Computation, General Overview, Nonbusiness Expenses, Charitable Contributions, Disallowance of Deductions, Federal Tax Administration & Procedures, Deficiencies, Restrictions on Deficiencies, Civil Procedure, Federal & State Interrelationships, Anti-Injunction Act, Preliminary Considerations, State & Local Taxes, Administration & Procedure, Exceptions, Collection of Taxes, Assessments