REDLANDS SURGICAL SERVICES DECISION UPHELD
arch 15 brought a brief decision by the M U.S. Court of Appeals for the Ninth Circuit in Redlands Surgical Services v. Cornrnissioner. The appellate court upheld the IRS position. with only the skimpiest of comments.
The court wrote that it "adopted" the Tax Court's holding that the exempt organization "ceded effective control over the operations of the partnerships and the surgery center to private parties. conferring impermissible private benefit." This, of course, prevents the organization from maintaining its tax-exempt status. I4.4, 4.5, 4.6, 6.2, 19, 32.41 The appellate court also wrote that the "benefit conferred on private parties by the surgery center's operations prevents [it] from attaining tax-exempt status under the integral part doctrine." [23.7] A petition for a rehearing before the full court of appeals is being readied.
A summary of the Tax Court's opinion in Redlands Surgical Services is in the September 1999 issue.
Next month's issue will inrludeaconimentaryon the state of the law in this area, now that Une Ninth Circuit has ruled, for public charities in general. '