- 17 -
A taxpayer may not deduct a payment as a charitable
contribution if the taxpayer receives a substantial benefit for a
payment to a charitable organization. Id. at 116-117; Ottawa
Silica Co. v. United States, 699 F.2d 1124, 1131 (Fed. Cir.
1983); Singer Co. v. United States, 196 Ct. Cl. 90, 449 F.2d 413,
420, 422 (1971); S. Rept. 1622, 83d Cong., 2d Sess. 196 (1954).
If the size of a taxpayer’s payment to a charity is clearly out
of proportion to the benefit received, the taxpayer may claim a
charitable contribution equal to the difference between a payment
to the charitable organization and the market value of the
benefit received in return on the theory that the payment has the
“dual character” of a purchase and a contribution. United States
v. Am. Bar Endowment, supra at 117. To be deductible, a
charitable contribution must be a gift; i.e., a transfer of
property without adequate consideration. Sec. 170(c); United
States v. Am. Bar Endowment, supra at 118; Sklar v. Commissioner,
supra at 612.
c. Dual Payment Theory and Tuition Paid for a Secular
and Religious Education
It is well established that tuition paid to schools which
provide both secular and religious education is not deductible as
a charitable contribution because it is not paid with detached
and disinterested generosity and because the payor expects a
substantial benefit in return. Oppewal v. Commissioner, 468 F.2d
1000 (1st Cir. 1972), affg. T.C. Memo. 1971-273; Winters v.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011