DeJong v. Comm'r of Internal Revenue, Docket No. 86903.

• Decision Date: 29 August 1961
• Docket Number: Docket No. 86903.
• Citation: 36 T.C. 896
• Parties: HAROLD DEJONG AND MARJORIE J. DEJONG, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
• Court: U.S. Tax Court

36 T.C. 896

HAROLD DEJONG AND MARJORIE J. DEJONG, PETITIONERS,

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket No. 86903.

Tax Court of the United States.

Filed August 29, 1961.

William H. Dick, Esq., for the petitioners.

William T. Ivey, Esq., for the respondent.

A portion of an amount paid to a tax-exempt institution which operated schools held not deductible as true charitable contribution where taxpayers enrolled their two children in one of the schools where the amount disallowed was not in excess of the cost of furnishing instruction to two children. Sec. 170, I.R.C. 1954.

Respondent determined a deficiency in the income tax of petitioners in the amount of $88 for the year 1958.

The sole issue is whether the respondent erred in determining that $400 out of $1,075 paid by petitioners to the Society for Christian Instruction in 1958 was not deductible as a charitable contribution under section 170 of the Internal Revenue Code of 1954.

FINDINGS OF FACT.

Some of the facts are stipulated, and, as stipulated, they are incorporated herein by reference.

Petitioners, husband and wife, at all times herein material, resided in Ripon, California, and filed a joint income tax return for the calendar year 1958 with the district director of internal revenue at San Francisco, California, on or before the due date.

Petitioners have for many years been members of the Christian Reformed Church.

The Society for Christian Instruction, of Ripon, California (hereinafter referred to as the society), is a nonprofit corporation organized under the laws of the State of California, and is a corporation organized and operated exclusively for educational purposes which is exempt from Federal income taxes under section 501(c)(3) of the 1954 Code.

The articles of incorporation of the society provide, in part, as follows:

SECOND: That the purposes for which said corporation is organized are:

(1) To establish and carry on a seminary or school of learning where pupils and students may obtain a sound and thorough training in Christian religion and doctrines, mechanical, literary and general eduction of the highest order. Such training and education shall be God-centered in accordance with the basic principles of this Society. These basic principles are the doctrines revealed in the infallible Word of God as expressed in the Three Formulas of Unity as subscribed to by the Reformed Churches, to wit: The Heidelberg Catechism, The Belgic Confession and the Canons of Dort.

(2) To provide for the organization of classes of instruction and the proper conducting of the same;

(3) To arrange for the delivery and holding of lectures, discussions, conferences and such meetings as may be calculated, directly or indirectly, to advance the spiritual or mental development of those who attend;

THIRD: That the place where said seminary or school is to be conducted is in the County of San Joaquin, State of California, in or near the City of Ripon, and the principal place of business of said corporation shall be at the same location, in or near the said City of Ripon, in the County of San Joaquin.

SIXTH: That all persons eighteen years of age and over, who subscribe to the basic principles of this Society, as set forth in Article Second, Paragraph (1) of these Articles, may become members of this corporation. All members are obligated to contribute to the financial support of the Society to the best of their ability. Applications for membership may be submitted at any regular meeting of the Board of Trustees or of the membership of the corporation.

NINTH: That this corporation shall exist wholly from the voluntary contributions, collections, legacies, and any other funds which may be legally collected by or donated to this corporation. That there shall not be any profit to any of the members and that in the event of dissolution, the assets of the corporation shall pass to the National Foundation, Grand Rapids, Michigan.

The society owned and operated a grammar school and a high school at Ripon, California, during 1958. The actual cost per grammar school student to the society during the year was not less than $200.

In the late summer or early fall of each year enrollment committees appointed by the board of trustees of the society meet with parents of prospective students. At these meetings the parents are given ‘a broad picture of what the cost will be in the operating budget for the coming year’ and they are asked to contribute to the best of their ability and to try to carry as much ‘of the load as they feel they can.’ When a parent is known to be ‘pretty well-to-do’ the suggestion is made that he contribute the full amount of the estimated cost per student for the coming year times the number of students he is enrolling. All of the parents interviewed are given an enrollment card to sign and are asked to indicate thereon the number of students they want to enroll and the amount of the contribution they intend to make toward the operation of the school or schools. With the exception of a few parents who had reservations against signing a card of this nature, signed cards were received from all parents.

Children of nonsociety member parents may be enrolled if facilities are available, and the parents sign a statement of policy in which they agree with the principles and purposes of the...