A federal District Court in Minnesota has rejected the IRS definition of an “educational institution” and allowed the Mayo Clinic to recover more than $11.5 million in unrelated business income tax. It has held that the IRS definition is too narrow and is not authorized by the Tax Code. The IRS assessed taxes in 2009 for unrelated business income received by Mayo from certain activities conducted through partnerships. Mayo paid the taxes and sued for a refund. Section 514 of the Tax Code excludes from unrelated business income certain types of passive income, which usually allows charities to exclude income from dividends, interest and rents from investments in their endowments. The Code...