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is a charitable disbursement under Texas law. Based on this
proposition, FSEP, Schoenstatt, ACADA, and WSA argue that they
are entitled to deductions for all the proceeds from their
"instant bingo" activities transferred to their general accounts.
Petitioners argue that such transfers are not distinguishable
from payments to outside charities. Petitioners assert that each
organization's general funds were used only for exempt purposes.
Petitioners argue that these amounts are deductible as business
expenses pursuant to sections 162(a) and 512(a).
Respondent counters that in order to be entitled to
deductions under sections 162(a) and 512(a), petitioners must
establish that any amounts claimed were actually paid from their
general fund or account for charitable purposes during the years
in issue and that the amounts paid were attributable to "instant
bingo" proceeds. Respondent contends that petitioners have
failed to establish that they expended amounts from "instant
bingo" proceeds transferred to their general accounts in excess
of those stipulated by the parties.
We do not agree with petitioners that a transfer of proceeds
from one account of an organization to another account of the
same organization is equivalent to a payment to an outside
charity for Federal tax purposes, or more precisely for the
purposes of sections 162(a) and 512(a). Whether the transfers
qualified as disbursements for purposes of the Texas Act is not
dispositive of the Federal tax consequences. Pursuant to section
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