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Charitable Contributions

• Another federal appeals court has ruled that payments made to the Church of Scientology for "auditing" and "training" services were properly deductible as charitable contributions. The IRS had argued that the payments were not deductible contributions since the donors had received a benefit in return for their payments. The appeals court agreed with the IRS that "a payment of money generally cannot constitute a charitable contribution if the contributor expects a substantial benefit in return." However, it specifically held that "a strictly spiritual or religious return is simply not enough" to make a contribution nondeductible. To hold otherwise would "present not only the problem of determining value but also the problem of excessive entanglement in the affairs of a religious institution," since courts would be required to monitor church records and activities in an attempt "to ...

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  • September 1, 1988