Bob Jones University Museum and Gallery, Inc. - Page 15
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US Tax Court > 1996 > Bob Jones University Museum and Gallery, Inc. - Page 15
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Respondent is especially concerned about preventing the
University from circumventing the Supreme Court’s 1983 decision
in Bob Jones Univ. v. United States, 461 U.S. 574 (1983).
Respondent contends that, if petitioner prevails, “Bob Jones
University will be able effectively to achieve the tax exempt
status which was denied to it by the Supreme Court.” By spinning
off component parts, respondent states, the University “may
achieve an aura of tax-exempt status itself by being associated
with various tax-exempt spin-offs.” Respondent further contends
that a decision for petitioner would create a “slippery slope”.
She believes that if the University is allowed to spin off its
museum, it may next attempt to spin off other component parts,
such as its library, cafeteria, and bookstore.
Respondent’s concerns about spinoffs are misplaced for
several reasons. First, as petitioner aptly points out,
respondent does not cite any cases to support her “aura”
argument, nor does she clearly define this exempt status-
defeating “aura”. Second, libraries, cafeterias, and bookstores
are essential parts of a university, while most universities do
not maintain art museums. Third, a cafeteria or bookstore spun
off from a taxable corporation might not independently qualify
for exempt status. Finally, while additional concerns may arise
if a university were to attempt to spin off one of its essential
parts, those concerns are not implicated here.
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