Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CENTER ON CORPORATE RESPONSIBILITY, INC. v. SCHULT

May 9, 1973.

Center on Corporate Responsibility, Inc. Plaintiff
v.
George P. Schultz, and R. F. Harless, Defendants.



The opinion of the court was delivered by: RICHEY

Findings of Fact, Conclusions of Law, and Order

RICHEY, District Judge: This cause having come before the Court for oral hearing on the Plaintiff's Motion for a Restraining Order or an Injunction, and the Court having considered the oral arguments of the parties and the written memoranda in support of and in opposition to Plaintiff's Motion, the Court makes the following:

Findings of Fact

 1. Plaintiff alleges that it is a non-profit, charitable and educational corporation organized under the laws of, and engaged in educational and charitable activities in, the District of Columbia.

 2. Defendants George P. Schultz and R. F. Harless, as Secretary of the Treasury and Acting Commissioner of Internal Revenue, are charged with the overall responsibility for administering the Internal Revenue Code, including the issuance of rulings on exemption from income taxes under section 501(c) (3) of the Internal Revenue Code of 1954, as amended, 26 U.S.C. § 501(c) (3).

 3. On September 3, 1970, and pursuant to the requirements of section 508(a) of the Internal Revenue Code, Plaintiff filed an "Application for Recognition of Exemption" (Internal Revenue Service Form 1023), under its then name, "Project on Corporate Responsibility, Inc.". Based on the information contained in the application and attachments, Plaintiff requested a ruling that it was exempt from federal income taxes under section 501(c) (3) of the Code, which provides that an organization is exempt from federal income taxes if it is "organized and operated exclusively for...charitable...or educational purposes," and provided that certain other conditions are met. The requested ruling would have enabled Plaintiff to receive deductible contributions under section 170(c) (2) of the Code, such contributions being the primary source upon which Plaintiff relied to carry out its activities.

 4. Subsequent to the filing of the application, and upon certain informal representations made by representatives of the Defendants to the Plaintiff, Plaintiff altered its corporate charter in order to more nearly conform to the requirements for exempt status under section 501(c) (3) of the Code. Plaintiff's name was changed from the "Project on Corporate Responsibility, Inc." to the "Center on Corporate Responsibility, Inc."

 5. As a result of this reorganization, Plaintiff, on August 18, 1972, filed an amended and superseding application for exemption. In its amended application, Plaintiff alleged that it had transferred to another organization certain of its activities, namely proxy contests, which had been questioned by representatives of the Defendants under Plaintiff's original application. The other organization is alleged by Plaintiff to be a wholly independent and self supporting entity.

 6. The Internal Revenue Service has not to date ruled on Plaintiff's application, and counsel for the Defendants have alleged that the application is still the subject of analysis and study by the Service. As a result of the delay, Plaintiff alleges that its source of funds has dried up because in the absence of a ruling from the Defendants that Plaintiff is exempt from federal income taxes under section 501(c) (3), and qualifies to receive charitable contributions under section 170(c) (2), prospective donors are unwilling to contribute monies to Plaintiff for fear that their contributions might not be deductible for federal income tax purposes. If such funds are not immediately forthcoming, Plaintiff maintains that it will be forced to terminate its existence.

 7. Plaintiff therefore seeks temporary relief in the form of an order requiring the Defendants to cease to fail and refuse to rule that Plaintiff is exempt from federal income taxes under section 501(c) (3) of the Internal Revenue Code, as amended, and qualified to receive deductible contributions under section 170(c) (2) of the Code, for the purpose of establishing Plaintiff's exempt status until such time as this Court shall render a final decision in this action, and qualifying as charitable contributions for federal income tax purposes that amount of funds sufficient to permit Plaintiff to pay its accrued liabilities, overhead and wages of its employees, and to maintain a bank balance of $1,000.00 until such time as this Court shall render a final decision in this action.

 8. Plaintiff ultimately seeks a permanent injunction enjoining Defendants from failing or refusing to rule that Plaintiff is exempt from federal income taxes under section 501(c) (3) of the Code as amended and is qualified to receive deductible charitable contributions under section 170(c) (2) of the Code as amended. Alternatively, Plaintiff seeks a declaratory judgment to the same effect.

 9. Counsel for the Defendants have asserted that the Internal Revenue Service has committed itself to act on Plaintiff's application by May 17, 1973.

 Conclusion of Law

 1. In order to obtain the Temporary Restraining Order or Preliminary Injunction which Plaintiff seeks, it must demonstrate each of the following conditions to the satisfaction of the Court: (1) that there is a strong probability that it will prevail on the merits of its case; (2) that there is an imminent danger of serious and irreparable harm by reason of the Defendants' actions; (3) that there is no adequate remedy at law; and (4) that the harm to the Plaintiff if an order is not issued outweighs the harm that will befall the Defendant if the Court issues the requested order, and that it will be in the general public interest for the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.