The Tax Law of Charitable Giving. Bruce R. Hopkins

the event (Urbauer v. Commissioner, 63 T.C.M. (CCH) 2492 (1992)).

      84 84 The Internal Revenue Service is referenced throughout as the “IRS.”

      85 85 Rev. Rul. 83-104, 1983-2 C.B. 46.

      86 86 Oppewal v. Commissioner, 468 F.2d 1000 (1st Cir. 1972); DeJong v. Commissioner, 309 F.2d 373 (9th Cir. 1962), aff'g 36 T.C. 896 (1961). The IRS ruled that payments to a church made in expectation that the church will pay the tuition for the contributors' children at a church-related school are not deductible as charitable gifts (Priv. Ltr. Rul. 9004030). By contrast, a contribution to a school was held to qualify as a deductible gift notwithstanding the fact that the donor's grandchild then attended the school (Priv. Ltr. Rul. 8608042).

      87 87 Rev. Rul. 83-104, 1983-2 C.B. 46, 47.

      88 88 Id. at 47–48.

      89 89 Id. at 48. Also Haak v. United States, 451 F. Supp. 1087 (D. Mich. 1978); Yoshihara v. Commissioner, 78 T.C.M. (CCH) 789 (1999).

      90 90 Sklar v. Commissioner, 282 F.3d 610 (9th Cir. 2002), aff'g 79 T.C.M. (CCH) 1815 (2000).

      91 91 See ch. 19.

      92 92 See § 20.2.

      93 93 One of the arguments advanced by the appellants in Sklar v. Commissioner, 282 F.3d 610 (9th Cir. 2002), was that their theory as to deductibility of the tuition payments is in accord with the IRS's “policy” of permitting members of the Church of Scientology to deduct payments for certain services, as stated in a 1997 closing agreement. The appellate court stated in dicta that this policy is in violation of the Internal Revenue Code or the Establishment Clause. 282 F.3d at 618–620. The IRS thereafter issued an information letter explaining that tuition payments to religious schools are not deductible as charitable gifts (INFO 2004-0091). These litigants again sought a charitable contribution deduction for a portion of tuition they paid to a religious school and again lost in court. Sklar v. Commissioner, 125 T.C. 281 (2005), aff'd, 549 F.3d 1252 (9th Cir. 2008). The IRS's legal counsel discussed disguised tuition payment programs in Chief Couns. Adv. Mem. 200623063; the IRS discussed the general nondeductibility of tuition payments in INFO 2004-0091.

      94 94 Rev. Rul. 76-232, 1976-1 C.B. 62. If the contribution is in excess of the monetary value of all benefits and privileges received, however, the amount of the excess would be a deductible charitable gift, as at an auction. Also, under appropriate circumstances, the expenses of attending a seminar may be deductible as a business expense, notwithstanding the fact that the seminar is conducted by a charitable or educational (IRC § 501(c)(3)) organization.

      95 95 In one instance, a subscription by an individual for a “room endowment” to a charitable nursing home was held to create an enforceable legal obligation by the individual or her estate; when paid, it was, for tax purposes, properly deemed a charitable contribution, even though the subscription, which entitled the individual to occupy the room, was paid the day before she was admitted to the home (Estate of Wardwell v. Commissioner, 301 F.2d 632 (8th Cir. 1962)).

      96 96 Rev. Rul. 80-77, 1980-1 C.B. 56.

      97 97 Arceneaux v. Commissioner, 36 T.C.M. (CCH) 1461 (1977).

      98 98 Wegner v. Lethert, 67-1 U.S.T.C. ¶ 9,229 (D. Minn. 1967). This opinion is surely in error, for the test is the extent of the value of the services received by the “donor” rather than the cost of providing the services or similar circumstances concerning the “donee.”

      99 99 Gen. Couns. Mem. 39877.

      100 100 Federal Election Commission Advisory Op. 1989-7.

      101 101 In a somewhat mysterious application of this principle, the IRS ruled that contributions by certain graduates of a college or university to a historical preservation society would not be deductible by the donors, where the funds donated would be used to preserve the historically valuable characteristics of a building housing a fraternity of which the prospective donors were members (alumni), because of their “personal interest” in the fraternity (Priv. Ltr. Rul. 9119011).

      102 102 Babilonia v. Commissioner, 681 F.2d 678, 679 (9th Cir. 1982), aff'g 40 T.C.M. (CCH) 485 (1980).

      103 103 Id., 681 F.2d at 679.

      104 104 E.g., Rev. Rul. 67-246, 1967-2 C.B. 104. See, e.g., § 20.2.

      105 105 E.g., Priv. Ltr. Rul. 200012061.

      106 106 Estate of Wood v. Commissioner, 39 T.C. 1 (1962).

      107 107 Ryan v. Commissioner, 28 T.C.M. (CCH) 1120 (1969).

      108 108 Murphy v. Commissioner, 54 T.C. 249 (1970); McMillan v. Commissioner, 31 T.C. 1143 (1959).

      109 109 Feistman v. Commissioner, 30 T.C.M. (CCH) 590 (1971).

      110 110 Cogan v. Commissioner, 30 T.C.M. (CCH) 987 (1971).

      111 111 Brotman v. Commissioner, 36 T.C.M. (CCH) 279 (1977).

      112 112 Hamilton v. Commissioner, 38 T.C.M. (CCH) 775 (1979).

      113 113 Ehrhart v. Commissioner, 42 T.C.M. (CCH) 1285 (1981).

      114 114 Poldrugovaz v. Commissioner, 47 T.C.M. (CCH) 860 (1984); Odd v. Commissioner, 47 T.C.M. (CCH) 1483 (1984).

      115 115 Hernandez v. Commissioner, 51 T.C.M. (CCH) 1631 (1986).

      116 116 Urbauer v. Commissioner, 63 T.C.M. (CCH) 2492 (1992).

      117 117 Edwards v. Commissioner, 64 T.C.M. (CCH) 728 (1992).

      118 118 Mount Mercy Associates v. Commissioner, 67 T.C.M. (CCH) 2267 (1994).

      119