The Justice Department has announced its intention not to appeal the March 4, 2004 jury verdict preserving the tax-exempt status of St. David's Health Care System, Inc. The decision by the Justice Department brings to a close the ongoing litigation between the Internal Revenue Service and St. David's regarding St. David's participation in a whole hospital joint venture with HCA, Inc. The Justice Department's announcement was not unexpected in light of the decision rendered by the Fifth Circuit Court of Appeals last year remanding the case back to the District Court in which the Fifth Circuit generally expressed support for the government's approach to joint ventures described in Rev. Rul. 98-15.
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