TAX COURT OPINION

Case: Damian S. Ngodo & Blessing I. Ngodo
Docket Number: 19320-12
Judge: Goeke
Opinion Type: bench
Filed: 02/07/2014
Pages: 6

UNITED STATES TAX COURT WASHINGTON, DC 20217 DAMIAN S. NGODO & BLESSING I. NGODO, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 19320-12. ) ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioners and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Joseph Robert Goeke at Houston, Texas, on January 15, 2014 containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, a decision will be entered under Rule 155. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. February 7, 2014 SERVED FEB 1 0 2014 Capital Reporting Company 3 1 2 3 4 5 6 7 8 9 10 11 12 13 Bench Opinion by Judge Joseph Robert Goeke January 15, 2014 Damian S. and Blessing I. Ngodo Docket No. 19320-12 THE COURT: The Court has decided to render oral findings of fact and opinion in this case, and the following represents the Court's oral findings of fact and opinion. The oral findings of fact and opinion shall not be relied upon as precedent in any other case. This opinion is rendered pursuant to Rule 152 of the Tax Court Rules of Practice and Procedure and is authorized by Internal Revenue Code Section 7459(b). Hereinafter, rule references are to the Tax 14 Court Rules of Practice and Procedure and section 15 16 17 18 19 20 21 22 23 references are to the Internal Revenue Code. This case is before the Court based upon our jurisdiction to review deficiency determinations made by the Internal Revenue Service after the timely filing of petitions seeking review of those determinations upon the receipt of a notice of deficiency from the Internal Revenue Service. That is the circumstance in the present case relative to a notice of deficiency which was issued to the 24 Petitioners for the year 2009. 25 The notice of deficiency had several issues 866.488.DEPO www.Capita1ReportingCompany.com I Capital Reporting Company 4 1 2 involving the disallowance of certain claimed expenses. All of those issues have been resolved, 3 with the exception of a claimed cash contribution of 4 5 6 7 8 9 10 11 $16,500 by the Petitioners which was deducted as a charitable expense in 2009. At the time they filed their petition in this case, the Petitioners were residents of Texas. The parties have stipulated the basic facts of the case, and those facts are not in dispute. Respondent concedes that the Petitioner did, in fact, make a cash contribution of $16,500 to St. Vincent's 12 Catholic Church in Otokpo Amesi. This location is 13 14 15 16 17 18 19 20 outside of the United States, and the Petitioner made this contribution directly to the foreign church, not through any United States Catholic organization or any other organization which would qualify for a charitable deduction under the Internal Revenue Code. Petitioner did not obtain documentation substantiating the deduction until July 10, 2011, at which time a statement was received from St. 21 Vincent's Catholic Church and provided to the 22 Internal Revenue Service examiner in Cincinnati, 23 Ohio. The parties have stipulated that St. Vincent's 24 Catholic Church is located in Anambra State of 25 Nigeria. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 The Petitioner explained that he made the contribution in recognition for the benefits bestowed upon him in achieving an education in his home country before he migrated to the United States. We believe his actions were very commendable, and we believe the circumstances of this case and the application of the Internal Revenue Code to these circumstances unfortunately does not provide 9 Petitioner with a statutory basis for his deduction, 10 11 12 13 14 15 16 17 18 19 20 21 as we will explain. In general, a taxpayer is entitled to deduct charitable contributions made during the taxable year to or for the use of certain types of organizations. Section 170(a)(1)(C). A taxpayer is required, however, to substantiate such contributions, and records must be maintained. Sections 6001 and Income Tax Regulations Section 1.6001-1(a). Contributions of cash in excess of $250, which is the circumstance of the present case, require that the taxpayer obtain a contemporaneous 22 written acknowledgment of the donation from the donee 23 24 25 in order to be allowed the deduction. Section 170(f)(8). The Internal Revenue Code provides specific requirements for this contemporaneous 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 written acknowledgment. 2 3 4 5 6 7 8 9 10 11 12 13 14 It must contain a description of the property or cash contributed, a statement of whether any goods or services were provided to the taxpayer in consideration for the cash contribution, and a description and good faith estimate of the value of any goods or services which were provided in consideration. Section 170(f)(8)(B). A written acknowledgment is contemporaneous if it is obtained by the taxpayer on or before the earlier of the date on which the taxpayer files a return for the taxable year in which the contribution was made or the due date of such return. Section 170(f)(8)(C). The documentation provided by the 15 Petitioners in the present case does not meet this 16 contemporaneous requirement, as it was not submitted 17 until 2011, as stated earlier. 18 19 20 21 22 23 In addition, the present deduction is not allowable because the party receiving the deduction is not considered a charity created or organized in the United States or under the law of the United States pursuant to section 170(c)(2). A Catholic church operating outside the United States and not 24 affiliated or directly related to Catholic churches 25 within the United States or otherwise allowable 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 charities within the United States is not the proper recipient of a charitable contribution which is deductible. See Anonymous v. Commissioner, T. C. Memo 2010-87. Because of the two legal impediments described which simply do not permit the Court to allow the current deduction based upon clear statutory law, the deduction remaining in issue in this case is not allowable. As stated previously, the parties have settled several other issues in the case, and because of that settlement, a Rule 155 computation will be necessary. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 12:15 p.m., the above- entitled matter was concluded.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com