Seasongood v. Commissioner of Internal Revenue
| Decision Date | 14 December 1955 |
| Docket Number | No. 12385.,12385. |
| Citation | 227 F.2d 907 |
| Parties | Murray SEASONGOOD and Agnes Seasongood, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Murray Seasongood and James D. Long, Cincinnati, Ohio, for petitioners.
Karl Schmeidler, Washington, D. C., H. Brian Holland, Ellis N. Slack, Lee A. Jackson, Washington, D. C., on brief, for respondent.
Before SIMONS, Chief Judge, and McALLISTER and MILLER, Circuit Judges.
The petitioners are husband and wife and the present review involves the disallowance by the Commissioner of deductions taken in their individual income tax return for 1946 and 1947 and in their joint income tax returns for 1948 and 1949. The deductions taken by the taxpayers were for contributions made in the tax years to the Hamilton County Good Government League, which the petitioners contend were allowable under the provisions of §§ 23(o) (2) and 101(6) of the Internal Revenue Code of 1939, 26 U.S.C., 1952 ed.
At the hearing before the Tax Court, Seasongood was the only witness. No effort was made to impeach his oral testimony, though exhibits showing 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 law.
It said of Seasongood that he had been a lawyer, in active practice, for more than fifty years, had for many years a deep interest in matters relating to good government, with special reference to the government of his community, had taken an active part 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. He had been for two terms Mayor of Cincinnati, had a national reputation as an expert in municipal corporation law, was the author of a case book upon the subject widely used in law schools, and had lectured in many states on this subject and the subject of clean and efficient local government. He had served as a lecturer at the Harvard Law School, as a Professor of Law at the University of Cincinnati Law School and as trustee, or in some other official capacity, in many organizations national in character and had engaged in charitable, educational and public welfare activity.
Of the League, it said that it was organized in 1934 and incorporated in 1941 as a corporation not for profit. Seasongood was its president from 1934 to 1945. The Articles and Constitution of the League specify its object 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 tax years had been nonpartisan in the sense that it had not contributed to or affiliated itself with any political party. Its main activities were in operating the "Cincinnati Forum of the Air," to permit public discussion by individual citizens of matters affecting the citizen's welfare, the preparation and distribution, through schools and other organizations, of literature explaining the danger to the public health by the spread of disease by rodents and the best methods for their control, and the education of citizens of the community to the importance of exercising their right to vote, irrespective of party or candidates. It had been the practice of the League in each year to prepare and mail to its members and to distribute to the voting public through employers and others notices of the times of approaching elections, calling attention to the necessity of registration and the dates for registration. It urged all voters to register and exercise the right to vote as something due to themselves and to their community. The income of the League was small, being derived from dues and occasional contributions. Its statement of income and disbursements for the taxable year 1948 is typical of its financial activities during the years in question. In that year, it received dues and contributions in the total amount of $2,112.00 and its expenditures were $2,534.90.
Our consideration is directed to the question, whether the activities of the League characterized the contributions made to it by the taxpayers as contributions to a corporation operated exclusively for charitable or educational purposes. The Tax Court reasoned as follows:
The Tax Court conceded that the League was organized for and operated at all times unselfishly in the public interest, as such interest appeared to its members, and that the facts set out in its findings show that the greater portion of its activities falls within the category of charitable or educational ones. The reports of its committees for the years in question indicate very active and unselfish work by the members of the committees in investigating proposed legislation and making a study of necessary legislation to effect some public purpose. However, the League, on the recommendation of these committees, endorsed candidates for political office and sponsored or opposed legislation through contacts with the legislative authorities. These activities consisted largely, if not entirely, of personal effort and work on the part of the individual members of the committees and of the League and were not of a character to involve the expenditure of its funds. The League did not employ individuals for this work but on the facts, as disclosed by the record, the Court was convinced that activities of this character constituted a substantial part of all of the activities of the League. Seasongood appears to have been the moving spirit in the League and it is understandable that his opinion of the League's work was that the activities treated as political were in the nature of educational work. His belief in this was further justified by the fact that over the past years he and his wife had made donations to the League and taken deductions for them on their returns, as allowable under § 23(o) and such deductions had not been questioned.
This leads to consideration of the terms of § 23(o) (2), printed in the margin.1 Since § 101(6) is identical with subdivision (2) of that section, it need not here be set forth. It will be observed that § 23(o) deals with deductions for individual contributions and gifts to corporations "operated exclusively for religious, charitable, scientific, literary, or educational purposes." Prior to 1934, the section did not include the language "and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation," this being written into the law in the Revenue Act of 1934. It seems clear, therefore, in the light of the amended section, that the term "exclusively" is given a connotation differing from the ordinary meaning of that term, as originally used, and activities which are minor, and not substantial, do not disqualify charitable or educational corporations from...
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