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As a general rule, personal, living, and family expenses are
nondeductible. Sec. 262(a). Subject to limitations not relevant
here, section 170(a) allows a deduction for charitable
contributions made during the taxable year to certain types of
organizations. For a contribution to be deductible, it must be
made to an organization “no part of the net earnings of which
inures to the benefit of any private shareholder or individual”.
Sec. 170(c)(2)(C).
The facts in the case before us are substantially similar to
the facts in a prior case before this Court, Miedaner v.
Commissioner, 81 T.C. 272 (1983). In Miedaner, the taxpayers
established and subsequently operated an entity known as the
Church of Physical Theology. They had established a separate
checking account for the church, but used funds from this account
for a variety of personal expenses, primarily for “living
allowances” for each of the taxpayers. In sustaining the
Commissioner’s disallowance of deductions claimed by the
taxpayers for amounts purportedly contributed to the church, this
Court stated:
the church was essentially inseparable from the personal
interests of Terrel and Penelope, and we agree with
respondent’s observation that petitioners literally bathed
themselves in personal benefits. Their “contributions”
funded their living allowances * * * . The church account
was simply a magic wand whereby personal expenses were
converted into tax deductions. Where contributions go to
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