RANCHO CORDOVA, Calif.—VSP Vision Care officially learned today that the U.S. Supreme Court will not hear VSP’s case regarding a 2003 ruling by the Internal Revenue Service that revoked the company’s previous tax-exempt status. VSP had asked the Supreme Court in mid-July to review the matter.

Said Thomas Fessler, VSP’s chief legal officer and general counsel, “VSP is disappointed that the U.S. Supreme Court decided not to hear our case. We will continue to operate as a not-for-profit organization with no service disruptions in vision care or coverage for our members, clients and doctors. We will also continue offering charity programs that benefit the communities we serve nationwide.”

In 2003, based on an examination conducted in 1999, the IRS issued a final determination revoking the tax-exempt status--which it had held since 1960--of VSP’s California corporation, effective Jan. 1, 2003. VSP California filed for and paid income taxes owed for 2003, then filed suit in federal court for a refund; it has continued to do business as a not-for-profit--while operating for-profit divisions as well--and has been paying federal income taxes since, then as the company’s appeals worked their way through the courts.

Aiding VSP in its efforts to get the Supreme Court to hear its case was former U.S. solicitor general Ken Starr, known for his work in the Whitewater investigation during President Bill Clinton’s term in office. Starr had said the case was “really about determining what guidelines the IRS uses to define what constitutes a tax exempt not-for-profit organization. VSP had a tax-exemption for more than 40 years, has not changed their business philosophy or focus on the community and yet lost their tax-exempt status.”

The company’s legal team had stressed VSP’s ongoing community service and charitable activities as a reason for restoring its tax-exempt status.

The Supreme Court decision on whether or not to hear VSP’s case was first expected in October, then delayed twice.

The case had been watched closely by legal experts both inside and outside the eyecare business for its possible ramifications on the question of what activities by non-profit or not-for-profit organizations deserve tax exemptions.