Michael and Marla Sklar - Page 29

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               Emek and Yeshiva Rav Isacsohn provided a religious and                 
          secular education for their students.  Regardless of petitioners’           
          reasons for choosing to educate their children at Emek and                  
          Yeshiva Rav Isacsohn, those schools did not provide exclusively             
          religious services.15                                                       
               4.   Whether the Agreement Reached Between the Internal                
                    Revenue Service and the Church of Scientology in 1993             
                    Affects the Result in This Case                                   
               In Hernandez v. Commissioner, 490 U.S. 680, 702 (1989), the            
          U.S. Supreme Court held that the record did not support the                 
          taxpayer’s claim of entitlement to deduct as charitable                     
          contributions payments to the Church of Scientology for what the            
          Church of Scientology calls auditing and training.  However, the            
          parties stipulated that an agreement dated October 1, 1993,                 
          between the Commissioner and the Church of Scientology settled              
          several longstanding issues.  According to a letter sent to                 
          petitioners in 1994 from the chief of the adjustments branch,               
          Fresno Service Center, the settlement agreement between the                 
          Commissioner and the Church of Scientology allows individuals to            




               15  Petitioners point out that the 1993 legislative history            
          states that the exception in secs. 170(f)(8) and 6115 for                   
          intangible religious benefits does not apply to education leading           
          to a recognized degree.  Petitioners contend that the secular               
          education provided by Emek and Yeshiva Rav Isacsohn does not lead           
          to a recognized degree.  In light of our conclusion that secs.              
          170(f)(8) and 6115 are substantiation and disclosure provisions,            
          we need not consider this contention further.                               





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