Peggy Lou Riker and Freda H. Grassmee v. Commissioner of Internal Revenue

This is an appeal from a decision of the United States Tax Court in the consolidated cases of Freda H. Grassmee, and Peggy Lou Riker, under 26 U.S.C.A. § 7482 . We will develop the factual background, first as to Freda Grassmee, second as to Peggy Lou Riker, and third as to Christ’s Church of the Golden Rule. Mrs. Grassmee will be referred to as Grassmee, Peggy Lou Riker as Riker, and Christ’s Church of the Golden Rule simply as the Church.

Grassmee

Grassmee and her eighty-four year old mother were members of the Church group. She was employed in a law office during the tax years in question, 1948 *221 and 1949, and during that period contributed her entire salary to the Church. She and her mother lived in a housing project maintained by the Church, and the entire subsistence of both mother and daughter was furnished by the Church. In short, Grassmee contributed all her earnings to the Church and the Church in return took care of all of the subsistence needs of herself and mother. The mother, due to her age, contributed nothing to the Church by way of money or services. The contributions made by Grassmee to the Church were accompanied by Church Form 399, which specified that the…

I concur in the holding that Mrs. Riker operated the Your Food Fountain in her own interest and that the decision of the Tax Court that she is taxable on its income be affirmed.

I also concur in the holding that Mrs. Grassmee’s income from her earnings is taxable and that she is not entitled to a deduction for the dependency of her mother.

I further concur in the holding that neither taxpayer is entitled to a charitable deduction for her contributions to the church corporation under 26 U.S.C. § 23 (o) providing for deduction for gifts to it if no part of its net earnings “inure to the benefit of any private shareholder or individual,” since the church in fact supports its members it is not such a religious corporation.

I concur in affirming on the above grounds.

244 F.2d 220 Peggy Lou RIKER and Freda H. Grassmee, Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Appellee. No. 15072. United States Court of Appeals Ninth Circuit. April 12, 1957. Rehearing Denied June 17, 1957. Howard B. Crittenden, Jr., San Francisco, Cal., for petitioner. Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, Hilbert P. Zarky, George F. Lynch, David O. Walter, John Potts Barnes, Chief Counsel, I. R. S., Washington, D. C., for respondent. 1 Before DENMAN, Chief Judge, FEE, Circuit Judge, and ROSS, District Judge. 2 ROSS, District Judge. 3 This is an appeal from a decision of the United States Tax Court in the consolidated cases of Freda H. Grassmee, and Peggy Lou Riker, under 26 U.S.C.A. § 7482 . We will develop the factual background, first as to Freda Grassmee, second as to Peggy Lou Riker, and third as to Christ's Church of the Golden Rule. Mrs. Grassmee will be referred to as Grassmee, Peggy Lou Riker as Riker, and Christ's Church of the Golden Rule simply as the Church. Grassmee 4 Grassmee and her eighty-four year old mother were members of the Church group. She was employed in a law office during the tax years in question, 1948 and 1949, and during…