A federal District Court in Ohio has permitted a group of Tea Party and other conservative organizations to pursue a class action against the Internal Revenue Service for allegedly illegal scrutiny of their applications for tax exempt status. 

Trustees of Girard College, a free elementary and secondary school for disadvantaged youth in Philadelphia, have been denied a request to eliminate their residential and high school programs temporarily in order to rebuild their reserves to assure the long-term viability of their programs.  The Pennsylvania Commonwealth Court has affirmed an Orphans’ Court decision denying the request.  (Estate of Stephen Girard, No. 2254 C.D. 2014, 1/21/16.) 

An appellate court in New York has permitted three churches to remove restrictions on permissible investments imposed by the same donor in his will.  The donor had said that the churches could invest the bequests only in insured bank accounts and government securities.  (In Re: Estate of Chamberlin, Sup. Ct., App. Div., Third Dept., NY, 1/7/16.)

An appellate court in Illinois has held that the state legislature cannot expand the basis for hospital real estate tax exemption beyond the provisions of the state Constitution.  It has remanded a claim for exemption by The Carle Foundation for four properties in Urbana, telling the trial court to determine whether they are being used for “charitable” purposes without regard for a new state law intended to set new standards for nonprofit hospital exemption in the state.

Members of Congress who were outraged that the IRS held up applications by conservative organizations for 501(c)(4) social welfare exemption, which arose in part because the IRS did not know what type and how much political activity is permitted for a (c)(4) organization, have prohibited the IRS from finalizing regulations defining the type and extent of permitted political activity before the 2016 Presidential election. 

Maimonides Medical Center, a nonprofit corporation operating a teaching hospital in Brooklyn, NY, is not entitled to a better interest rate on the refund of over-paid FICA taxes than a for-profit corporation, the Second Circuit Court of Appeals has held.  It has affirmed a District Court decision saying that the statutory provision for refund interest applies to for-profit and nonprofit corporations alike.