Did you read the Davis case? Did you read the Kessler case? Good, so now, in 4-5 sentences, put yourself in the shoes (and robes) of the judges who wrote those opinions and tell me whether would arrive at the same or a different conclusion that the actual judges did. Explain and support your reasoning.

DAVIS CASE

HAROLD DAVIS and ENID DAVIS, Plaintiffs-Appellants, v. UNITED STATES OF AMERICA, Defendant-Appellee

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT 861 F.2d 558 November 14, 1988

Appellants Harold and Enid Davis claimed charitable contribution deductions un- der IRC 170 for funds they sent to their two sons for their support while they served as missionaries for the Church of Jesus Christ of Latter-Day Saints at the New York City Mission and at the New Zealand/Cook Islands Mission. These de- ductions were disallowed by the IRS. The District Court sustained the disallow- ance.

BACKGROUND

A primary activity of the Church is its worldwide missionary program. Missionar- ies serve the Church for two years at a location assigned by the Church. Mission- ary work is uncompensated.

Most missionaries are between the ages of 19 and 22; many receive payments from their parents to defray their living expenses. After an individual is "called" by the Church to serve, the Church advises parents of the amount necessary for the missionary's support and requests their assistance.

The life of a missionary is closely supervised. Mission rules prohibit missionaries from dating, attending movies or plays, or engaging in sports or other activities. Missionaries are required to submit weekly reports detailing the time spent in Church service and explaining their expenses. The Missionary Handbook contains the following admonition: "The money received for your support is sacred and should be spent wisely and only for necessary work. Keep expenses at a mini- mum. Keep records of all expenditures."

The Church gives several reasons for its preference not to collect and distribute contributions for its missionaries. The Church feels that direct contributions to missionaries foster the Church doctrine of sacrifice and consecration. The Church believes that direct transmittal promotes frugality by missionaries because of their awareness of the personal sacrifices being made on their behalf.

The appellants' sons, Benjamin and Cecil, both were "called" when they were 19 years old. In 1980 and 1981 the appellants transferred $3,480 and $4,135 to Benjamin. During 1981 appellants transferred $1,518 to Cecil. Benjamin and Ce- cil used this money for living expenses. The appellants claimed charitable contri- bution deductions for 1980 and 1981 for these amounts.

DISCUSSION

Under Section 170, deductions are allowed for contributions "to or for the use of" qualified organizations. The requisite elements are that (1) the transfer of property is made with no expectation of a quid pro quo, (2) it is made to a quali- fied recipient, and (3) it is made "to or for the use of" the qualified recipient.

The appellants argue that the payments to their sons were "for the use of" the Church and therefore deductible as charitable contributions. The government ar- gues that the expenditures were not charitable contributions because they were never within the physical control of the Church.

The control gauge stems from the basic requirement that the beneficiary of a charitable contribution must be indefinite. When a taxpayer intends a contribu- tion for a specific purpose or even a specific individual, but the charity retains control over the funds, this requirement is satisfied. But when a taxpayer makes a contribution directly to the beneficiary so that the charity never possesses the funds, let alone controls their use, there can be no guarantee that the benefici- ary will be indefinite. See Barry's Estate v. Commissioner, 311 F.2d 681 (9th Cir. 1982) (property bequeathed to a priest, a member of Jesuit Order, as opposed to Order itself, not deductible although the legatee was obligated by his vow of poverty to transfer the property to the Order).

Here the charity lacked control over the funds. Contributions were deposited directly into the personal checking accounts of the taxpayers' sons. While the Church admonished the missionaries to spend their money wisely, the use to which the funds were put was solely within the control of the missionaries.

CONCLUSION

We do not question the high ideals of the Church or the valuable services it per- forms in connection with its missionary program. We are constrained by the law, however. The decision is affirmed.

KESSLER CASE

Lewis Hanford Kessler, Jr., and Kay Bethard Kessler, Petitioners v. Commissioner of Internal Revenue, Respondent

UNITED STATES TAX COURT 87 T.C. 1285 December 8, 1986

Respondent determined a deficiency in Federal income tax for 1978. The issue is whether petitioners may deduct expenses for travelling to and from, and staying in, Puerto Rico for the purpose of religious worship. Petitioners reside in Michigan.

FINDINGS OF FACT

Petitioner Lewis' religious belief is in "a/the Sun God".1/ In accordance with his beliefs, Lewis makes annual journeys to the region located between the Tropic of Cancer and the Tropic of Capricorn for the purpose of worship and prayer.

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1/ No evidence was presented as to Kay's religious beliefs. Lewis testified that he does not know whether Kay shares his belief in the Sun God.

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In 1978, Lewis and Kay made a trip to Puerto Rico. The claimed deductions were ex- penses for transportation, hotel accommodations, meals, etc. Lewis does not belong to an congregation of Sun God worshippers. The expenses for the Puerto Rico trip were not given or contributed to or for the use of a religious organization.

OPINION

Again,

Petitioners contend that respondent violates Lewis' rights under the Constitution by allowing members of organized religions to deduct the expenses of exercising their religions while denying petitioners the right to deduct the expenses of worshipping the Sun God.2/

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - - 2/ The First Amendment to the United States Constitution reads as follows:

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

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Section 170 clearly allows a deduction for gifts or contributions to organized church- es. In contrast, Lewis holds religious beliefs that do not involve an organization to further his ability to exercise his religion. Because section 170 does not allow him a tax deduction for expenses he incurs in the exercise of his religion, petitioners con- tend that they are denied equal treatment solely because of the form in which Lewis chooses to exercise his religious beliefs.

The issue is whether the distinction drawn between worshippers in organized reli- gions and those who choose to worship without an organized religion results in a governmental preference to organized religions in violation of the First Amendment.

Religious liberty is a basic right guaranteed by the Constitution. One of the specific evils feared by those who drafted the Establishment Clause and fought for its adop- tion was that the taxing and spending power would be used to favor one religion ov- er another or to support religion in general. The concern was quite clearly that reli- gious liberty ultimately would be the victim if government could employ its taxing and spending powers to aid one religion over another or to aid religion in general.

The requirement in section 170 that all donees be organizations applies equally to the religious and the nonreligious. The purposes of the charitable contribution deduc- tion can only be furthered if the Government can be assured that the funds are ap- propriately expended. Without an organization that can be audited, the ability of the Government to acquire this assurance is greatly diminished.

We do not question the sincerity of Lewis' beliefs, nor are we presented with a stat- ute that would prevent the exercise of those beliefs. The financial burden on petition- ers here is not an unconstitutional burden on petitioners' free exercise rights. Peti- tioners are free to practice their religion, they just will not be subsidized.

Accordingly, the argument of unconstitutionality is rejected. We hold that section 170 does not prefer one religion over another or otherwise violate Lewis' rights under the First Amendment.

Again, Did you read the Davis case? Did you read the Kessler case? Good, so now, in 4-5 sentences, put yourself in the shoes (and robes) of the judges who wrote those opinions and tell me whether would arrive at the same or a different conclusion that the actual judges did. Explain and support your reasoning.