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May 14, 2021

Eighth Circuit reverses and remands district courtís summary judgment grant for Mayo Clinic in UBIT refund case

The Eight Circuit has reversed and remanded (Mayo Clinic v. US) a district court’s summary judgment decision for the Mayo Clinic, concluding that Reg. Section 1.170A-9(c)(1) is in-part valid and that how IRC Section 170(b)(1)(A)(ii)  applies “to Mayo’s tax years in question cannot be determined as a matter of law on this summary judgment record.” The IRS had argued that the Mayo Clinic was not entitled to a refund of unrelated business income tax (UBIT) because it was not an "educational organization" under IRC Section 170(b)(1)(A)(ii) and the regulations thereunder. The district court had concluded that the regulations impermissibly imposed additional requirements to qualify as an educational organization beyond those included in the statute. (See Tax Alert 2019-1464.) A Tax Alert is forthcoming.