Michael Sklar Marla Sklar v. Commissioner of Internal Revenue

282 F.3d 610 Michael SKLAR; Marla Sklar, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. No. 00-70753. United States Court of Appeals, Ninth Circuit. Argued and Submitted September 7, 2001. Filed January 29, 2002. Amended February 27, 2002. Jeffrey I. Zuckerman, Curtis, Mallet-Prevost, Colt & Mosle, Washington, DC, for the appellants. Thomas J. Sawyer, Attorney, Tax Division, Department of Justice, Washington, DC, for the appellee. David Zwiebel, New York, NY, for amicus curiae Agudath Israel of America, in support of the appellants. Appeal from the United States Tax Court. Tax Ct. No. 1556-97. Before PREGERSON, REINHARDT and SILVERMAN, Circuit Judges. Opinion by Judge REINHARDT; Concurrence by Judge SILVERMAN AMENDED OPINION REINHARDT, Circuit Judge. 1 The taxpayer-petitioners in this action, Michael and Marla Sklar, challenge the Internal Revenue Service's ("IRS") disallowance of their deductions, as charitable contributions, of part of the tuition payments made to their children's religious schools. In the notice of deficiency sent to the Sklars, the IRS explained that "[s]ince these costs are personal tuition expenses, they are not…

Opinion by Judge REINHARDT; ' Concurrence by Judge SILVERMAN

*612 AMENDED OPINION

The taxpayer-petitioners in this action, Michael and Marla Sklar, challenge the Internal Revenue Service’s (“IRS”) disal-lowance of their deductions, as charitable contributions, of part of the tuition payments made to their children’s religious schools. In the notice of deficiency sent to the Sklars, the IRS explained that “[s]ince these costs are personal tuition expenses, they are not deductible.” Specifically, the Sklars sought to deduct 55% of the tuition, on the basis that this represented the proportion of the school day allocated to religious education. The Sklars contend that these costs are deductible under section 170 of the Internal Revenue Code, as payments for which they have received “solely intangible religious benefits.” They also argue that they should receive this deduction because the IRS permits similar deductions to the Church of Scientology, and it is a violation of administrative consistency and of the Establishment Clause to deny them, as Orthodox Jews, the same deduction. The Tax Court found that -under De Jong v. Commissioner, 309 F.2d 373, 376 (9th Cir.1962), tuition…

concurring:

Why is Scientology training different from all other religious training? - We should decline the invitation to answer that question. The sole issue before us is whether the Sklars’ claimed deduction is valid, not whether members of the Church of Scientology have become the IRS’s chosen people.

The majority states that the Church of Scientology’s closing agreement is not relevant because “the Sklars[are] not similarly situated to the members of the Church of Scientology....” That may or may not be true, but it has no bearing on whether the tax code permits the Sklars to deduct the costs of their children’s religious education as a charitable contribution. Whether the Sklars are entitled to the deduction they claim is governed by 26 U.S.C. § 170 , Hernandez v. Commissioner, 490 U.S. 680 , 109 S.Ct. 2136 , 104 L.Ed.2d 766 (1989), and United States v. American Bar Endowment, 477 U.S. 105, 106 S.Ct. 2426 , 91 L.Ed.2d 89 (1986), not by the Church of Scientology closing agreement.

The Sklars receive something in return for their tuition payments — the education of their children. Thus, they are not entitled to a charitable deduction under § 170, as Judge Reinhardt…