By Richard R. Hammar, J.D., LL.M., CPA
© Copyright 1988, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m08 m15 c0488
The Tax Court ruled that a taxpayer could not
deduct an alleged charitable contribution made to his local branch
of the "Universal Life Church." The taxpayer, an airline pilot,
established a local "chapter" of the Universal Life Church in his
home, and established a church "checking account" at a local bank.
The taxpayer and his family apparently were the only members of the
church, and a number of checks were drawn on the church's account
to pay for personal expenses of members of the taxpayer's family.
In denying a deduction for contributions made to the "church," the
court observed that the taxpayer had failed to establish that his
church qualified as a tax-exempt organization under federal law,
and that he never parted with control over the alleged
contributions. Labeling the taxpayer's allegations "ludicrous" and
"frivolous," the court awarded the government $5,000 in damages
besides the additions to tax. Dunn v. Commissioner, T.C. Memo.
1988-45 (1988).