Thursday, December 22, 2005
Tax Court: Parents Cannot Deduct Payments to Their Children's Religious Schools, Despite Scientology Precedent
The Tax Court ruled yesterday in Sklar v. Commissioner, 125 T.C. No. 14 (12/21/05), that a couple's tuition and fee payments to their children's Jewish day schools are not charitable contributions because they received a substantial benefit from their payments and lacked charitable intent.
For prior opinions in the case, see:
- Sklar v. Commissioner, T.C. Memo. 2000-118
- Sklar v. Commissioner, 282 F.3d 610 (9th Cir. 2002)
Joe Kristan observes:
The 1993 IRS settlement with the Church of Scientology came into play in the Tax Court today. Michael Sklar, a Los Angeles CPA, attempted to deduct a portion of tuition paid to send his children to a Jewish day school. He reasoned that if the Scientologists can deduct their "auditing" and "training" fees as charitable contributions, it's only fair to let him similarly deduct the cost of a religious education for his children. Fair or not, the Tax Court didn't agree. The Tax Court sidestepped the equal protection issue, falling back on established court rulings that religious eduction is not deductible as a charitable deduction.
For prior TaxProf Blog coverage, see here and here. See Howard Bashman's post on the case here.
As posted on my own blog <http://expatowl.blogspot.com/2005/12/news-from-tax-land.html>, there is much to suggest that at least part of the Sklars' problem is the fact that Michael Sklar, a CPA who prepares personal income tax returns for the public, filed his own 1994 tax return a month and a day later than the October 15th extension. Prior to that, the IRS had apparently been accepting his claimed charitable deductions on his 1991, 1992 and 1993 returns.
Posted by: Expatriate Owl | Dec 23, 2005 7:01:29 AM