Does Charity Begin at Home? The Tax Status of a Payment to an Individual as a Charitable Deduction

In White v. United States, the United States Court of Appeals for the Tenth Circuit reversed a district court decision and held that the taxpayers could deduct expenses they paid directly to their dependent son to support his missionary activities away from home. In Brinley v. Commissioner, the Tax Court sitting in Texas refused to follow the Tenth Circuit in White, and held that while the missionary son was entitled to deduct his personal expenses, the parents could not deduct their payment of the son’s expenses.

This Note supports the result in Brinley and argues that the requirement that a deductible contribution go to a qualified organization rather than to an individual should also apply to a deduction claimed for payment of another person’s unreimbursed expenses incurred in the rendition of services to a qualified organization. Part I examines the standards that the courts have applied in determining whether the requirements of section 170 are met under various circumstances. Part II analyzes the decisions in the Mormon missionary cases, and argues that the denial of the deduction in Brinley is the appropriate result. Part III discusses some potential abuses, and concludes that to allow a deduction for direct payments to individuals invites abuse and contravenes the congressional intent behind the statutory requirement that contributions be made to qualified organizations.