Re: [Maury_and_Baty] Re: Sklars are in waiting!
- 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 -----
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
I don't recall if we've posted the actual text from their previous
case or not. My apologies if this is redundant.
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
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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