Saturday, December 24, 2005

Tax Court Rejects Establishment Clause Claim On Deductions

Sklar v. Commissioner, decided by the U.S. Tax Court on Dec. 21, held that no part of tuition paid to an Orthodox Jewish day school was deductible for federal income tax purposes as a charitable contribution. The school offered both secular and religious instruction. Taxpayers had argued that the portion paid for religious instruction was deductible under Section 170 of the Internal Revenue Code and that the IRS's refusal to allow a deduction violated the Establishment Clause because the IRS allows members of the Church of Scientology to deduct as charitable contributions "auditing" and "training" payments. However, the court rejected these arguments, distinguishing cases involving churches organized exclusively religious purposes. The taxpayers had previously litigated similar claims for an earlier year's tax return. [Thanks to Steven H. Sholk for the lead.]

UPDATE: Here is a link to the 9th Circuit decision in the earlier litigation. [Thanks to Expatriate Owl.]