Redlands Surgical Services v. Commissioner of Internal Revenue (Summary)

Redlands Surgical Services v. Commissioner of Internal  Revenue, No. 99-71253 (9th Cir. Mar. 15, 2001)

The Ninth Circuit Court of Appeals denied a surgical center’s request for review of an IRS decision denying the surgical center tax-exempt status. Adopting the grounds for denial given by the tax court in its 1999 opinion, the appeals court agreed that the surgical center had relinquished control of its operations to a private party, thus “conferring an impermissible private benefit.”
Thus, the surgical center could not meet the federal tax law requirement of operating exclusively for tax-exempt purposes.