The Portland Golf Club v. Commissioner of Internal Revenue case in 1989 revolved around the tax implications of a non-profit organization selling its property. The Portland Golf Club, a non-profit entity, sold part of its land and placed the proceeds into an investment fund. The IRS argued that these funds were subject to federal income tax as they constituted unrelated business taxable income (UBTI). However, the golf club contended that since it was reinvesting the money back into maintaining their facilities rather than using it for operational expenses, it should not be taxed. Ultimately, the Supreme Court sided with the IRS stating that regardless of how profits from sales are used by a nonprofit organization; if those profits come from activities unrelated to their exempt purpose - such as selling real estate - they are considered UBTI and thus taxable under federal law.

The dissenting opinion in the case of Portland Golf Club v. Commissioner of Internal Revenue argued that the majority's decision was inconsistent with both precedent and tax policy. The dissent contended that the club's non-member income should be taxed because it was not incidental to its exempt purpose, but rather a substantial part of its total revenue. They believed this income was derived from an activity regularly carried on by the club which competed with similar commercial enterprises, thus violating established principles for tax-exempt organizations. Furthermore, they disagreed with the majority’s interpretation of “unrelated business taxable income,” arguing it contradicted Congress’ intent when drafting related legislation and could lead to potential abuse by other nonprofit entities seeking to avoid taxation on significant portions of their incomes.