Seasongood v. Comm'r of Internal Revenue, Docket Nos. 42537

Decision Date28 June 1954
Docket Number42538,Docket Nos. 42537,42539.
Citation22 T.C. 671
PartiesMURRAY SEASONGOOD, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.AGNES SEASONGOOD, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.MURRAY SEASONGOOD AND AGNES SEASONGOOD, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
CourtU.S. Tax Court

OPINION TEXT STARTS HERE

Donations by petitioners to two organizations held not subject to deduction under section 23(o), Internal Revenue Code, and donations by them to another organization held to be deductible under that section. Further held that donations by petitioner Murray Seasongood to the first two organizations do not constitute business expenses deductible under section 23(a)(1)(A), Internal Revenue Code. James D. Long, Esq., Harry Stickney, Esq., and Murray Seasongood, Esq., for the petitioners.

R. G. de Quevedo, Esq., for the respondent.

In these proceedings, consolidated for hearing, respondent has determined deficiencies in income tax as follows:

+--------------------------------+
                ¦Docket No. 42537                ¦
                +--------------------------------¦
                ¦Year¦Petitioner        ¦Amount  ¦
                +----+------------------+--------¦
                ¦1946¦Murray Seasongood ¦$736.00 ¦
                +----+------------------+--------¦
                ¦1947¦Murray Seasongood ¦1,532.65¦
                +--------------------------------+
                
Docket No. 42538
                1946 Agnes Seasongood  $325.03
                1947 Agnes Seasongood  342.01
                
Docket No. 42539
                1948 Murray and Agnes Seasongood $6,275.88
                1949 Murray and Agnes Seasongood 3,552.72
                

The issue in each proceeding is the deductibility of certain contributions made by the petitioners in the taxable years. Certain of the facts are stipulated and so found. Other facts hereinafter recited are found upon evidence presented at the hearing.

FINDINGS OF FACT.

The petitioners are husband and wife and residents of Cincinnati, Ohio. They filed separate returns for 1946 and 1947 and joint returns for 1948 and 1949. All returns were filed with the collector of internal revenue at Cincinnati, Ohio.

The petitioner Murray Seasongood (hereinafter referred to as Seasongood) has been a lawyer in active practice for more than 50 years and is a member of a law firm in Cincinnati from which he derives a very substantial income. He has for many years had a deep interest in matters relating to good government, with special reference to the government of his community, and has taken an active part for years in civic matters pertaining to the health and general welfare of the people of Cincinnati and the efficient administration of the law in his county and State.

Seasongood has been mayor of Cincinnati for two terms, has a national reputation as an expert with reference to municipal corporation law, is the author of a case book on this subject which is widely used in law schools, and has lectured in many States on this subject and the subject of clean and efficient local government. He has served as a lecturer at Harvard Law School, as a professor of law at the University of Cincinnati Law School, and has served as trustee or in some other official capacity with many other organizations, national in character, and engaged in charitable, educational, and public welfare activities.

In 1934 there was organized in Cincinnati the Hamilton County Good Government League (hereinafter referred to as the League). This organization was incorporated in 1941. Seasongood was president of the League from 1934 to 1945. The articles of incorporation of the League evidenced the formation of a corporation not for profit.

These articles and its constitution specify the object of the League to be ‘to provide an opportunity for discussion of matters of civic importance and to advance good government.’ The activities of the League during the years here in question have been nonpartisan in the sense that it has not contributed to or affiliated itself with any political party. Its main activities during the years 1946 to 1949, inclusive, were in operating the ‘Cincinnati Forum of the Air’ to permit public discussion by individual citizens of matters affecting the city's welfare, the preparation and distribution through schools and other organizations of literature explaining to the citizens the danger to the public health by the spread of disease by rats and the best methods for rodent control, and the education of the citizens of the community in the importance of their exercising in all elections their right to vote, irrespective of their party or candidate. It has been the practice of the League in each year to prepare and mail to its members and to distribute to the voting public through corporate employers, notices of the times of approaching elections, calling attention to the necessity that a voter be registered and giving the dates for registration and urging all voters to register and exercise their right to vote as something due themselves and their community.

The income of the League is small, being represented by dues of its members and occasional contributions. Its statement of income and disbursements for the taxable year 1948 is typical of its financial activities during the 4 years in question. In this year it received dues and contributions in the total amount of $2,112, and its expenditures during that period were as follows:

+--------------------------------------------------+
                ¦Wages, salaries, and commissions¦       ¦$1,382.21¦
                +--------------------------------+-------+---------¦
                ¦Taxes                           ¦       ¦185.90   ¦
                +--------------------------------+-------+---------¦
                ¦Miscellaneous expenses:         ¦       ¦         ¦
                +--------------------------------+-------+---------¦
                ¦Telephone                       ¦$151.86¦         ¦
                +--------------------------------+-------+---------¦
                ¦Postage and printing            ¦415.79 ¦         ¦
                +--------------------------------+-------+---------¦
                ¦Publicity—radio                 ¦201.30 ¦         ¦
                +--------------------------------+-------+---------¦
                ¦General expense                 ¦197.84 ¦         ¦
                +--------------------------------+-------+---------¦
                ¦                                ¦       ¦966.79   ¦
                +--------------------------------+-------+---------¦
                ¦Total                           ¦       ¦$2,534.90¦
                +--------------------------------------------------+
                

The annual report of the executive secretary of the League for 1946 shows the beginning of the weekly radio forum, ‘Cincinnati's Town Meeting of the Air,’ and the organization of a ‘Young Voters' group to meet the need of civic education and participation in the civic education of the youth of the community. It also issued a bulletin at intervals of 4 months discussing its activities, distributed voting-registration-information cards hereinbefore referred to, and cooperated with the Citizens' Committee for Rat Elimination in distributing literature on this subject. In addition to these activities the report of its executive secretary shows the following activities by its Legislative and Election Machinery committees:

Legislative Committee. Frank J. Richter, Chairman.

Worked with Civil Service Committee in opposing legislation to take the Director of Recreation Commission out of civil service.

Wrote various letters to Governor Lausche urging studies of the Ohio taxation system and funds to cities.

Followed numerous ordinances proposed and pending in City Council.

Urged County Commissioners to find better quarters for children being housed temporarily by County Welfare Department.

Stream pollution measures stimulated.

Legislative program for 1947 Ohio general assembly prepared.

Election Machinery Committee. Leo H. Beckman, Chairman.

(a) Co-operated with other organizations in get-out-the-vote campaign.

(b) Issued over 20,000 registration-information cards, sent to League members; and also to other civic organizations for other membership, and to stores and factories for use in payroll envelopes.

(c) Studied candidates and issues in November 1946 election. League endorsed all three county issues, city, and school tax levy for operating funds and improvements; endorsed the Rapid Transit franchise. Endorsed the candidacy of John W. Keefe and Judge Raymond J. Wilson.

The annual report of the executive secretary of the League for 1947 shows its activities in the distribution of registration-information cards, rodent-control pamphlets, operation of Cincinnati Town Meeting of the Air and Young Voters group, and its co-sponsorship of a Civil Service Institute. The activities of its Legislative and Election Machinery committees are set out as follows:

Legislative Committee. John W. Keefe, Chairman.

1. Recommended:

a. The retention of PR in City elections.

b. Endorsements of the nine Charter candidates and Theodore Berry for Council.

c. Endorsement of the Citizens School Committee candidates.

d. A favorable vote on the City Tax Levy.

e. A favorable vote on the UC Tax Levy amendment.

f. A negative vote for the Soldiers' Bonus.

g. A negative vote for the Vehicle Tax amendment.

2. Recommended the passage of the following bills that were introduced in the regular session of the Ohio General Assembly:

a. Reduction of the 65% requirement for passage of bond issues to 55%.

b. Judges retirement plan.

c. Tax Commission—to study taxes in Ohio.

d. Urban Redevelopment.

e. Forbidding solicitation of votes for judicial candidates.

f. Forbidding solicitation of votes for Board of Education candidates.

g. Child Welfare—to be financed one-half by State and one-half by County.

3. Urged that bills be introduced providing for:

a. Massachusetts Ballot for State and County elections.

b. New County Zoning Law. (Passed)

c. Central Count in elections.

d. Judicial candidates not being allowed to run in party primaries or to support party platform before they know what the platform is.

e. Use of the Prudents Investment theory for ascertaining the rate for public utilities.

f. Improvement in county welfare set-up (Hamilton County has since consolidated its Welfare...

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    • United States Tax Court
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    ...* * * the so-called `political activities' of the League were not in relation to all of its other activities substantial"), revg. 22 T.C. 671 19. In 1990, former section 2036(c) was repealed, and former subsection (d) was redesignated section 2036(c)). See Omnibus Budget Reconciliation Act ......
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    ...362 (2d Cir. 1959), cert. denied 364 U.S. 834 (1960); Estate of Philip R. Thayer v. Commissioner, 24 T.C. 384 (1955); Seasongood v. Commissioner, 22 T.C. 671 (1954), affd. 227 F.2d 907 (6th Cir. 1955); Huntington National Bank v. Commissioner, 13 T.C. 760 (1949); Better Business Bureau of W......
  • Seasongood v. Commissioner of Internal Revenue, 12385.
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    • December 14, 1955
    ...the League's financing and explaining its activities were made available. The Tax Court made detailed findings of fact and in its opinion, 22 T.C. 671, undertook to apply what, in its view, was the applicable It said of Seasongood that he had been a lawyer, in active practice, for more than......
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