Kalgaard v. C.I.R., 84-7659
Decision Date | 02 July 1985 |
Docket Number | No. 84-7659,84-7659 |
Citation | 764 F.2d 1322 |
Parties | -5389, 85-2 USTC P 9513, 19 Fed. R. Evid. Serv. 210 Donald James KALGAARD, Petitioner-Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. |
Court | U.S. Court of Appeals — Ninth Circuit |
Peter R. Stromer, Los Gatos, Cal., for petitioner-appellant.
Ann Belanger Durney, Douglas G. Coulter, Glenn L. Archer, Jr., Michael Paup, Dept. of Justice, Washington, D.C., for respondent-appellee.
Appeal from the United States Tax Court.
Before ANDERSON and CANBY, Circuit Judges, and NIELSEN, District Judge **.
Donald James Kalgaard appeals the order of the United States Tax Court disallowing his claimed contributions to a chartered congregation of the Universal Life Church. On appeal, the plaintiff raises four issues: 1) whether the decision of the Tax Commissioner to disallow the plaintiff's claimed contributions was proper; 2) whether the church records allegedly establishing plaintiff's contributions to the church should have been admitted into evidence; 3) whether the Tax Court decided constitutional issues not in its jurisdiction; and 4) whether the Tax Court improperly imposed additions to the plaintiff's tax deficiencies as allowed by 26 U.S.C. Sec. 6653(a).
In response, the Commissioner of Internal Revenue asserts that the claims made by the plaintiff are without merit and are raised in intentional disregard of applicable rules. The Commissioner therefore seeks the imposition of sanctions against the plaintiff and his attorney.
We affirm the Tax Court's decision and impose double costs and $1,000.00 attorneys' fees, plaintiff and his counsel being jointly and severally liable.
The findings of the Tax Court disallowing claimed deductions by a taxpayer will be upheld unless such findings are clearly erroneous. Commissioner v. Duberstein, 363 U.S. 278, 290, 80 S.Ct. 1190, 1199, 4 L.Ed.2d 1218 (1960). A decision by the Commissioner disallowing deductions "has the support of a presumption of correctness, and the petitioner has the burden of proving it to be wrong." Welch v. Helvering, 290 U.S. 111, 115, 54 S.Ct. 8, 9, 78 L.Ed. 212 (1933). Taxpayers may deduct charitable contributions made "to or for the use of" an organization operated "exclusively for religious, charitable," or similar purposes. 26 U.S.C. Sec. 170(c)(2)(B). "The courts have repeatedly held that exemptions for parent churches do not automatically carry over to local congregations." Hall v. Commissioner of Internal Revenue, 729 F.2d 632, 634 (9th Cir.1984) (citations omitted).
In this instance, because the plaintiff has failed to prove that the local congregations he contributed to were organized and operated exclusively for religious purposes, the plaintiff has not overcome the "presumption of correctness" in favor of the Commissioner. The plaintiff has also failed to show that his contributions to the local chapter of the Universal Life Church did not inure to his own benefit. See Hall, 729 F.2d at 634.
We find that the Commissioner's decision to disallow the plaintiff's claimed contributions is not clearly erroneous.
The Tax Court's decision to exclude evidence is reviewed for an abuse of discretion. United States v. Kearney, 560 F.2d 1358, 1369 (9th Cir.), cert. denied, 434 U.S. 971, 98 S.Ct. 522, 54 L.Ed.2d 460 (1977). Federal Rules of Evidence 1006.
Without the source documents being made available to the Tax Court, reliability of the summaries presented by the plaintiff to the court was not capable of verification. Exclusion of the plaintiff's summaries as hearsay evidence was proper and was not an abuse of discretion.
"Courts routinely permit cursory questioning in the Tax Court to determine whether an organization is entitled to a religious exemption." Hall, 729 F.2d at 635 (citation omitted). This allows the court to determine whether the organization meets the objective criteria for tax-exempt status pursuant to Internal Revenue Code Sec. 170. Id. The entitlement to a tax exemption claimed by Kalgaard in this case raises "no real questions regarding 'religion' as referred to in the First Amendment ...." United States v. Dykema, 666 F.2d 1096, 1100 (7th Cir.1981), cert. denied, 456 U.S. 983, 102 S.Ct. 2257, 72 L.Ed.2d 861 (1982).
The plaintiff's claim that the Tax Court impermissibly decided a constitutional issue is without merit.
Appellate review of the findings of the Tax Court will not be overturned unless they are clearly erroneous. Commissioner v. Duberstein, 363 U.S. 278, 291, 80 S.Ct. 1190, 1199, 4 L.Ed.2d 1218 (1960). If any part of underpayments of taxes due is a result of "negligence or intentional disregard of rules and regulations" of the Internal Revenue Service, then "there shall be added to the tax an amount equal to 5 percent of the underpayment." I.R.C. Sec. 6653.
The Tax Court did not err in assessing the 5 percent addition to plaintiff's taxes. Plaintiff failed to sustain his burden of showing that his underpayment of tax was not due to negligence or intentional disregard of the revenue laws. The additions are affirmed.
The court of appeals may assess damages against a plaintiff and his or her attorney for filing a frivolous appeal, for delay, or for...
To continue reading
Request your trial-
Little v. C.I.R.
...of evidence is reviewable for abuse of discretion. Hudspeth v. Commissioner, 914 F.2d 1207, 1213 (9th Cir.1990); Kalgaard v. Commissioner, 764 F.2d 1322, 1323 (9th Cir.1985). The constitutionality of the additions to tax imposed under I.R.C. § 6653 and 6661 is a question of law, reviewable ......
-
Graham v. C.I.R.
...the Tax Court disallowing claimed deductions will not be disturbed unless those findings are clearly erroneous. See Kalgaard v. Comm'r, 764 F.2d 1322, 1323 (9th Cir.1985). We agree with the legal standards followed by the Tax Court in its decision, and we do not find its factual conclusions......
-
Wedvik v. Comm'r of Internal Revenue, Docket No. 21304-84.
...T.C. Memo. 1985-546; Botwinick v. Commissioner, T.C. Memo. 1985-501; Kalgaard v. Commissioner, T.C. Memo. 1984-283, affd. 764 F.2d 1322 (9th Cir. 1985). See also Rager v. Commissioner, 775 F.2d 1081 (9th Cir. 1985), affg. an unpublished order of this Court; Larsen v. Commissioner, 765 F.2d ......
-
Mone v. C.I.R.
...similar to the appeals brought by Brennan and Wert before this Court. See Larsen v. C.I.R., 765 F.2d 939 (9th Cir.1985); Kalgaard v. C.I.R., 764 F.2d 1322 (9th Cir.1985). The claims raised by appellants in those cases, however, had already been rejected by the Ninth Circuit in Hall v. C.I.R......