Judge rules in Mayo's favor in IRS lawsuit
An almost three-year legal battle with the IRS over whether Mayo Clinic can be classified as a school has ended with a judge ruling that the question at the heart of the case exceeds the government's bounds of authority and is "unlawful."
U.S. District Court Judge Eric Tostrud issued a summary judgement in favor of Mayo Clinic on Tuesday. If the ruling stands, it means that the IRS owes the clinic an $11.5 million refund. It also clears the way for the clinic to save millions in taxes on future investment earnings.
"Obviously, it's a big decision for Mayo … an important decision for Mayo," said Joe Colaiano of Mayo Clinic's legal department. "We were happy of the outcome and we thought we were right all along."
The dispute stems from the IRS claiming that the non-profit Mayo Clinic's annual revenue generated by “debt-financed real-estate investment” is taxable as "unrelated business income." While non-profit hospitals and medical institutions are taxed on that type of revenue, IRS statute says schools and educational institutions are exempt from those taxes.
Read more: https://www.postbulletin.com/news/local/judge-rules-in-mayo-s-favor-in-irs-lawsuit/article_10962b5a-b934-11e9-84d7-b7687edc6648.html
(Rochester Post Bulletin)
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