TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, April 29, 2005

Can Packers Fan Deduct Season Tickets Donated to Charity to Avoid Jail Time?

More classroom tax fodder ripped from the news headlines:  a Wisconsin judge "ordered a woman convicted of theft to decide whether to spend 90 days in jail or donate her family's Packers tickets next season to charity."  The TaxProf Discussion Group sprang into action, debating whether the woman will be able to claim a charitable deduction if she chooses to avoid jail time by donating her Packers tickets to charity.

  • Christopher Hoyt (Missouri-Kansas City), who sparked the discussion, argued that, under Waldman v. Commissioner, 88 T.C. 1384 (1987), aff'd, 850 F.2d 611 (9th Cir. 1988) (denying § 162 deduction to embezzler who avoided jail by making restitution to victims), there should be no § 170 charitable deduction where the contribution was coerced by the court.
  • Others asked, as a theoretical matter, if it mattered that the quid pro quo did not come from the charity.
  • John Lee (William & Mary) noted that in Allied-Signal, Inc. v. Commissioner, T.C. Memo 1992-204 (1992), aff’d, 54 F.3d 767 (3d Cir. 1995), the courts denied a claimed $8 million charitable deduction for payments Allied-Signal made to a nonprofit environmental fund in lieu of a fine. 

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