The Law of Tax-Exempt Organizations, 2026 Supplement, 13th Edition

CHAPTER EIGHTEducational Organizations

• § 8.3 Educational Institutions
  • (a) Schools, Colleges, and Universities
• § 8.4 Instruction of Individuals
• § 8.5 Instruction of Public

 

§ 8.3 EDUCATIONAL INSTITUTIONS

(a) Schools, Colleges, and Universities

p. 221. Insert following second complete paragraph:

The U.S. Court of Appeals for the Eighth Circuit affirmed the decision of the district court in Mayo Clinic v. United States,^54.1 which held that the system-wide operations of the clinic evidenced that the system operated for a substantial educational purpose, and even though its patient care functions were substantial, they were not noneducational. The appellate court agreed with the district court's interpretation of the term primary to mean a “substantial purpose” of the organization and rejected the government's argument that primary should be interpreted to mean something more than substantial, such as “predominantly” or “of first importance.” The court noted that it “is difficult to pinpoint a singular, predominant activity for … an academic medical center whose education, patient care, and research functions are inextricably intertwined.”^54.2 Moreover, the appellate court observed, even if the government's interpretation of primary were applied instead, “the district court was not foreclosed from finding, as it did, that [the organization's] substantial patient care activities are not noneducational, given [its] careful integration of education and clinical practice.” ...