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Re: [Maury_and_Baty] Re: Sklars are in waiting!

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  • Tamara
    Yet, through auditing the Scientologists claim to be able to kill their enemies from across the globe using only the power of their minds. Surely that
    Message 1 of 4 , Apr 2, 2004
      Yet, through "auditing" the Scientologists claim to be able to kill their enemies from across the globe using only the power of their minds. Surely that "power" has some value, at least in the comic book world? Hehehe

      I wish I could draw. The "powers" claimed by Scientologists certainly would make for interesting "superhero" antics.

      ----- Original Message -----
      From: rlbaty50
      To: Maury_and_Baty@yahoogroups.com
      Sent: Friday, April 02, 2004 12:32 PM
      Subject: [Maury_and_Baty] Re: Sklars are in waiting!

      Following my name below is the excerpt from the Sklar's earlier case
      dealing with the same issue. There's probably no reason to think the
      Tax Court will find any other result than in the previous case. If
      that be the case, I guess we'll just have to wait and see what the
      Sklars do about moving up to the appeals court and possibly the
      Supreme Court.

      I don't recall if we've posted the actual text from their previous
      case or not. My apologies if this is redundant.

      Robert Baty


      TCM, [CCH Dec. 53,834(M)] , Michael and Marla Sklar v.
      Commissioner, Charitable contributions: Deductibility: Donees:
      Tuition payments: Religious organizations.--, (Apr. 05, 2000)

      The law is well settled that tuition paid for the education of the
      children of the taxpayer is a family expense, not a charitable
      contribution to the educating institution. See DeJong v. Commissioner
      [62-2 USTC 9794 ], 309 F.2d 373, 376 (9th Cir. 1962), affg. [Dec.
      24,997 ] 36 T.C. 896 (1961). A tuition payment to a parochial school
      is generally not considered a charitable contribution because the
      taxpayer making the payment receives something of economic value,
      i.e., educational benefits, in return. See Winters v. Commissioner
      [72-2 USTC 9729 ], 468 F.2d 778, 781 (2d Cir. 1972), affg. [Dec.
      31,074(M) ] T.C. Memo. 1971-290. The payment proceeds primarily from
      the incentive of anticipated benefits to the payor beyond the
      satisfaction which flows from the performance of a generous act. See
      DeJong v. Commissioner, supra at 376. The Court of Appeals for the
      Ninth Circuit further stated:

      The value of a gift may be excluded from gross income only if the
      gift proceeds from a "detached and disinterested generosity" or "out
      of affection, admiration, charity or like impulses" and must be
      included if the claimed gift proceeds primarily from "the
      constraining force of any moral or legal duty" or from "the incentive
      of anticipated benefit of an economic nature." We must conclude that
      such criteria are clearly applicable to a charitable deduction under
      ยง170 .

      Id. at 379.

      It is clear in this case that petitioners' payments to the schools
      were not made out of detached and disinterested generosity or out of
      affection, admiration, charity, or like impulses. They were intended
      as payment in the nature of tuition for petitioners' children, a
      personal expense. These mandatory payments were received as payments
      for tuition by the schools. Therefore, they do not qualify as
      charitable contribution deductions.

      In Hernandez v. Commissioner [89-1 USTC 9347 ], 490 U.S. 680 (1989),
      the Supreme Court held on the record presented that payments
      for "auditing" to the Church of Scientology were not deductible as
      charitable contributions because they represented a quid pro quo;
      i.e., the payor was receiving goods or services in return for the
      payment. The taxpayer in Hernandez had argued, inter alia, that the
      disallowance of the auditing payments represented an impermissible
      failure by the IRS to consistently enforce section 170 , relying on
      various revenue rulings, such as Rev. Rul. 70-47 , 1970-1 C.B. 49,
      pertaining to such things as pew rents, building fund assessments,
      and periodic dues. See id. at 703. However, the Supreme Court
      rejected this contention because the record therein did not support

      Petitioners contend that the terms of a closing agreement between the
      Commissioner and the Church of Scientology are relevant and will show
      that the Commissioner has agreed to allow charitable contributions
      for all or a percentage of auditing payments, and that the
      disallowance of the charitable contribution deductions herein in
      light of the settlement with the Church of Scientology is in
      violation of the First Amendment. Petitioners have made a proffer of
      evidence tending to conform to their allegations. 3

      In her dissenting opinion in Hernandez v. Commissioner, supra at 705,
      Justice O'Connor stated:

      It must be emphasized that the IRS' position here is not based upon
      the contention that a portion of the knowledge received from auditing
      or training is of a secular, commercial, nonreligious value. Thus,
      the denial of a deduction in these cases bears no resemblance to the
      denial of a deduction for a religious-school tuition up to the market
      value of the secularly useful education received. See Oppewal v.
      Commissioner [72-2 USTC 9688 ], 468 F.2d 1000 (1st Cir. 1972);
      Winters v. Commissioner [72-2 USTC 9729 ], 468 F.2d 778 (2d Cir.
      1972); DeJong v. Commissioner [62-2 USTC 9794 ], 309 F.2d 373 (9th
      Cir. 1962). ***

      There is nothing in the record to show that petitioners' situation is
      analogous to that of the members of the Church of Scientology. The
      Church of Scientology and the schools involved in this case are not
      identical in their organization, structure, or purpose. Auditing, as
      defined in Hernandez v. Commissioner, supra, is not the same as a
      general education, which may include some percentage for religious
      education. Thus we perceive no denominational preference to require
      any inquiry into a purported violation of the Establishment Clause.
      As stated earlier, deductions have been generally disallowed for
      payments made in exchange for educational benefits, regardless of
      faith. See Oppewal v. Commissioner [72-2 USTC 9688 ], 468 F.2d 1000
      (1st Cir. 1972), affg. [72-2 USTC 9688 ] T.C. Memo. 1971-273; Winters
      v. Commissioner, supra; DeJong v. Commissioner, supra. The taxpayers
      in those cases were similarly situated with petitioners, and
      petitioners have not established that they are similarly situated
      with the members of the Church of Scientology who make payments for
      auditing. Petitioners' reliance on Hernandez and the concept of
      consistent interpretation and enforcement is rejected.

      To reflect the above,

      Decision will be entered for respondent.


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