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Memo. 1993-199. We discuss each of those cases in more detail
below.
Earlier Cases
Disabled American Veterans
In DAV I, the exempt organization engaged in the rental of
its mailing list, but, unlike petitioner, the organization itself
performed all of the list management and list fulfillment
functions. On the question of whether the list rental payments
were royalties, the Court of Claims concluded that the list
rentals "[were] the product of extensive business activity by DAV
and [did] not fit within the types of 'passive' income set forth
in section 512(b)." Disabled Am. Veterans v. United States, 650
F.2d at 1189. The court found that the payments were more akin
to rent from the use of personal property than to royalties, and
held that the income from the transaction was not excluded from
UBTI under section 512(b). See id. at 1189-1190.
In DAV II, the same exempt organization that appeared before
the Court of Claims in DAV I appeared before this Court; however,
a different taxable year was in issue. Although DAV II involved
the same parties and legal issues as DAV I, we concluded that the
issuance of Rev. Rul. 81-178, supra, had changed the legal
climate. Consequently, we held that collateral estoppel did not
apply. See Disabled Am. Veterans v. Commissioner, supra at 69.
Relying on the definition of royalty contained in Rev. Rul. 81-
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