Reverend Joseph J. Kleinsasser, Individually and on Behalf of Susie Kleinsasser, Deceased v. United States

This is a tax-refund suit brought by Reverend Joseph J. Kleinsasser on behalf of himself and his now-deceased wife, Susie Kleinsasser. Reverend Kleinsasser (hereinafter “taxpayer”) is a member of a tax-exempt religious organization that is subject to taxation in accordance with I.R.C. § 501(d). Taxpayer argues that he is entitled to the investment tax credit provided by I.R.C. § 38(a) on his 1972 and 1973 tax returns. The court below granted the Government’s motion for summary judgment. Kleinsasser v. United States, 522 F.Supp. 460 (D.Mont.1981). Reluctantly, we affirm.

I. Background

The taxpayer is a member of the Milford Colony in Wolf Creek, Montana. Milford Colony is an incorporated Hutterite community and a unit of the Hutterische Church Society. This society, which dates back to the early 1500’s, is an organization of Protestant Christians who live a communal life in colonies of between 80 and 100 members. There are over 30 such colonies in Montana. Colony members take a vow of poverty and engage in agricultural pursuits. Since the individual Hutterites have no personal property, all expenses, both communal and individual, are paid out of a common treasury.

The Hutterites…