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Commissioner nevertheless disallowed the claimed deduction
because the taxpayers had failed to strictly comply with the
requirements set forth in the regulations. The taxpayers sought
review in this Court.
To decide whether the doctrine of substantial compliance
applied, the Court examined whether the requirements of the
regulations are mandatory or directory with respect to the
purpose of section 170. Id. at 41. We held that
At the outset, it is apparent that the essence of
section 170 is to allow certain taxpayers a charitable
deduction for contributions made to certain
organizations. It is equally apparent that the
reporting requirements of section 1.170A-13, Income Tax
Regs., are helpful to respondent in the processing and
auditing of returns on which charitable deductions are
claimed. However, the reporting requirements do not
relate to the substance or essence of whether or not a
charitable contribution was actually made. We
conclude, therefore, that the reporting requirements
are directory and not mandatory. * * * [Id.]
The Court then concluded that because the taxpayers had
provided substantially all of the information specified in the
regulations, “The denial of a charitable deduction * * * would
constitute a sanction which is not warranted or justified.” Id.
at 42. We noted, however, that Bond was not a case where the
taxpayers failed to obtain a timely appraisal of the donated
property and thereby failed to establish its value. Id.
Petitioners argue that, like the taxpayers in Bond, they
substantially complied with the regulations. Denying them a
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