Carl & Ruth Briggs and Raymond J. Hurbi v. Commissioner of Internal Revenue

Briggs and Hurbi (taxpayers) appeal from a judgment of the United States Tax Court, 75 T.C. 465 , that union dues paid by the taxpayers and allocated for construction of recreation centers and distribution to a building fund were not deductible under I.R.C. § 162(a) (1976). We affirm.

Compulsory dues providing personal benefits to union members are non-deductible, see Rev.Rul. 78-128,1978- 1 C.B. 39 , and the determination of personal and business expenses turns on the purpose of the payments, see Rev.Rul. 81-192, 1981- 31 C.B. 50 . Thus, the payments in dispute are not deductible because they were distributed into a fund intended to benefit union members personally. An individual union member’s inability or unwillingness to take advantage of the benefits does not change the fact that the dues are used to provide personal benefits for union members.

Taxpayers rely in part on Revenue Ruling 54-190,1954- 1 C.B. 46 for their contention that, because the dues allocated for the construction of the recreation centers are compulsory union assessments resulting in no actual or vested personal benefit to them individually, the dues are deductible as ordinary and necessary business…