Charles H. Addis and Cindi Addis - Page 14




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          contribution.”  H. Rept. 103-111, at 783, 785 (1993), 1993-3 C.B.           
          167, 359, 361.  Congress enacted the substantiation requirements            
          of section 170(f)(8) to require charitable organizations that               
          receive quid pro quo contributions, i.e., payments made partly as           
          a contribution and partly in consideration for goods or services            
          provided to the donor by the donee organization, to inform their            
          donors that the deduction under section 170 is limited to the               
          amount by which the payment exceeds the value of goods or                   
          services provided by the charity.  Id.                                      
               Petitioners and NHF designed a scheme purporting to provide            
          no benefits to petitioners in exchange (or consideration) for               
          petitioners’ payments.  However, petitioners received substantial           
          benefits from NHF under the life insurance policy.  In the                  
          documents structuring this transaction, petitioners and NHF                 
          avoided stating any obligation of NHF and made it appear that               
          petitioners made an outright gift to NHF with no quid pro quo.              
          However, petitioners expected, and they told NHF that they                  
          expected, NHF to use their contributions for both their and NHF’s           
          benefit.                                                                    
               Petitioners and NHF both had incentives to proceed under               
          this scheme; with the pot sweetened by charitable contribution              
          deductions, it was in both parties’ interests (1) for NHF to                
          continue to pay the insurance premiums, and (2) for petitioners             
          to continue to make payments to NHF.  NHF would be entitled to              






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