Hernandez v. Commissioner

Hernandez v. Commissioner

Infobox SCOTUS case
Litigants = Hernandez v. Commissioner
ArgueDate = November 28
ArgueYear = 1988
DecideDate = June 5
DecideYear = 1989
FullName = Hernandez v. Commissioner of Internal Revenue
USVol = 490
USPage = 680
Citation =
Prior =
Subsequent =
Holding = The payments for auditing or training sessions do not satisfy the "contribution [s] or gift [s] " inquiry necessary for deductibility under Internal Revenue Code §170.
SCOTUS = 1988-1990
Majority = Marshall
JoinMajority = Rehnquist, White, Blacknum, Stevens
Dissent = O'Connor
JoinDissent = Scalia
NotParticipating = Brennan, Kennedy
LawsApplied =

"Hernandez v. Commissioner", 490 U.S. 680 (1989), is a decision of the United States Supreme Court relating to the Internal Revenue Code §170 charitable contribution deduction [ [http://www.taxalmanac.org/index.php/Sec._170 TaxAlmanac - Internal Revenue Code:Sec. 170. Charitable, etc., contributions and gifts ] ] .

Facts

The Church of Scientology, founded by L. Ron Hubbard, believe that an immortal spiritual being exists inside everyone. The Church uses the "auditing" practice to help interested people become aware of this spiritual being. The Church uses the "training" courses to help participants to become auditors. The Church charges for those services due to the belief that, any time a person receives something, that person must pay something back in return [490 U.S. 680, 685] . The income generated by those services constitutes the Church's primary source of income [490 U.S. 680, 685] .

The taxpayers made payments to branch churches in exchange for auditing or training services. The taxpayers tried to deduct these payments on their Federal Income Tax returns under the charitable contribution deduction.

Issue

The Church of Scientology is entitled to receive charitable contributions deductible under IRC §170. In this case, the Supreme Court decided whether payments for auditing or training services fall under the umbrella of deductible charitable contributions.

Holding

The payments for auditing or training sessions do not satisfy the "contribution [s] or gift [s] " inquiry necessary for deductibility under IRC §170.

Reasoning

Justice Thurgood Marshall began the majority opinion with a discussion of the legislative history of the "contribution or gift" limitation as described in IRC §170(c). When the tax bill was enacted in 1954, Congress distinguished between unrequited payments and payments made in return for goods and services. Specifically, the gift characterization was deemed to only apply "if there were no expectation of any quid pro quo..." [ [http://supreme.justia.com/us/490/680/case.html HERNANDEZ V. COMMISSIONER, 490 U. S. 680 (1989) - US Supreme Court Cases from Justia & Oyez ] ] In later decisions, the quid pro quo analysis was expanded to also apply to charitable contributions. [ [http://supreme.justia.com/us/477/105/case.html UNITED STATES V. AMER. BAR ENDOWMENT, 477 U. S. 105 (1986) - US Supreme Court Cases from Justia & Oyez ] ]

Hernandez and other taxpayers argued that the "quid pro quo" determination did not apply to this situation because the benefit they were receiving through the auditing and training was purely religious. [(5) http://supreme.justia.com/us/490/680/case.html] The Court emphasized that IRC §170(c) clearly states that donations to religious organizations are only deductible if they are contributions or gifts, regardless of the expectations underlying the payments. The Court hesitated to broaden the scope of the deduction to any payments designed to achieve a religious benefit, since that could open the door to deductions such as those for parochial school tuition or payments to church-affiliated hospitals. The Court noted that refraining from characterizing the services provided by religious institutions prevented the government - the IRS and court system - from effectively monitoring the practices of a church.

Dissent

Justice O'Connor and Justice Scalia disagreed with the majority opinion. The opinion noted that there have been no instances where the IRS has previously denied deductibility on a quid pro quo basis even though the benefit was entirely spiritual or religious. Because of the difficulty in putting a dollar value on intangible religious benefits, the Government had, up until this case, chosen to ignore the quid pro quo argument and allow these deductions.

ee also

*List of United States Supreme Court cases, volume 490

References

Further reading

*cite encyclopedia |last=Dane |first=Perry |editor= |encyclopedia=Encyclopedia of American Civil Liberties |title=Hernandez v. Commissioner of Internal Revenue, 490 U.S. 680 (1989) |url=http://ssrn.com/abstract=980786 |edition= |year= |publisher= |volume=2 |location= |id= |isbn= |doi= |pages=761–762 |quote=
* cite journal | last = Passas | first = Nikos | authorlink = | coauthors = Castillo, Manuel Escamilla | year = 2006 | month = | title = Scientology and its ‘clear’ business | journal = Behavioral Sciences & the Law | volume = 10 | issue = 1 | pages = 103–116 | doi = 10.1002/bsl.2370100110 | url =


Wikimedia Foundation. 2010.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • Commissioner of Baseball — This article is about the MLB Commissioner. For the NPB Commissioner, see Commissioner of Baseball (NPB). Kenesaw Mountain Landis, the first Commissioner of Baseball The Commissioner of Baseball is the chief executive of Major League Baseball and …   Wikipedia

  • Humberto Hernandez Jr. — Humberto Enrique Hernandez Jr. (born in June 14, 1962) was a City of Miami Commissioner and attorney.Hernandez the son of a Bay of Pigs veteran was a graduate of Belen Jesuit Preparatory School in Miami in 1980.In 1995, Hernandez ran for the City …   Wikipedia

  • Rafael Hernández Colón — Infobox Governor name= Rafael Hernández Colón caption= order=4th office= Governor of the Commonwealth of Puerto Rico term start= January 2, 1973 term end=January 2, 1977 term start=January 2, 1985 term end=January 2, 1993 lieutenant= predecessor …   Wikipedia

  • Johnny Hernandez — Chef Johnny Hernandez (born November 13, 1968) is a Latino chef and graduate from the Culinary Institute of America Hyde Park in New York. He founded True Flavors Culinary Concepts, San Antonio s premier catering company, in 1994. He is also the… …   Wikipedia

  • Church of Scientology — Scientology build …   Wikipedia

  • Scientology in Australia — A protester, dressed as the Scientology character Xenu, stands next to a Scientology building in Sydney, Australia (2008) Scientology has existed in Australia since the mid 1950s. Their numbers vary depending upon the source: according to the… …   Wikipedia

  • Doctrine of Exchange — The Doctrine of Exchange is a central tenet[1] of Scientology, which dictates that for spiritual well being, anytime a person receives something, he must pay something back [2] and balance inflow with outflow .[1] The Church of Scientology has… …   Wikipedia

  • E-Meter — L éléctromètre scientologue L’E meter, ou électropsychomètre ou encore électromètre (à ne pas confondre avec l appareil de mesure physique du même nom), est un instrument de mesure électrique utilisé par l Église de Scientologie destiné à l… …   Wikipédia en Français

  • E-meter — L électromètre scientologue L’E meter, ou électropsychomètre ou encore électromètre (à ne pas confondre avec l appareil de mesure physique du même nom), est un instrument de mesure électrique utilisé par l Église de Scientologie destiné à l… …   Wikipédia en Français

  • Électropsychomètre — E meter L éléctromètre scientologue L’E meter, ou électropsychomètre ou encore électromètre (à ne pas confondre avec l appareil de mesure physique du même nom), est un instrument de mesure électrique utilisé par l Église de Scientologie destiné à …   Wikipédia en Français

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”