Case Name: Bertha Poole Weyl, Petitioner, v. Commissioner of Internal Revenue, Respondent
Court: United States Board of Tax Appeals
Jurisdiction: United States
Decision Date: 1930-02-11
Citations: 18 B.T.A. 1092
Docket Number: Docket Nos. 27924, 29426
Parties: Bertha Poole Weyl, Petitioner, v. Commissioner of Internal Revenue, Respondent.
Judges: MaRquette agrees with this dissent.
Reporter: Reports of the United States Board of Tax Appeals
Volume: 18
Pages: 1092–1096

Head Matter:
Bertha Poole Weyl, Petitioner, v. Commissioner of Internal Revenue, Respondent.
Docket Nos. 27924, 29426.
Promulgated February 11, 1930.
Henry E. Kelley, Esq., for the petitioner.
J. E. Marshall, Esq., for the respondent.

Opinion:
OPINION.
Aeundell :
The issue is whether contributions made to the League for Industrial Democracy in 1922 and 1923 were allowable as deductions under section 214 (a) (11) (B), Revenue Act of 1921. That it is an association and therefore to be treated as a corporation under section 2 (2), and that no part of its net income inures to the benefit of a private individual, we think is clear. It is claimed that the League was " organized and operated exclusively for educational purposes."
" Educational " and other derivatives of the word " educate " have been given exceedingly broad definitions by authorities and it may well be that some part of the work of the League could be brought within the definitions laid down, but, as we pointed out in J. Noah H. Slee, 15 B. T. A. 710, we take the view that Congress did not intend such broad definitions to be the test in these cases.
The object of the League, as stated in its constitution, was, " education for a new social order based on production for use and not for profit." Its use of the word " education " is, of course, not con- elusive as to the character of the League. It appears from the evidence that the League sought to bring about what it calls " a new social order " through the use of both the spoken and written word, the former in giving lectures and debates, and the latter through the publication and distribution of printed literature. One of petitioner's witnesses stated, and it is contended by her counsel, that the League presented conflicting ideas on social and economical problems so that those interested in such matters could determine for themselves what stand to take. Granting that this was the League's practice in the lectures and debates presented under its auspices, and granting that there may have been some element of education in such functions, it does not necessarily follow that it operated exclusively as an educational institution and this is a requirement of the statute. Herbert E. Fales, 9 B. T. A. 828. An examination of the printed literature in evidence discloses quite plainly, we think, that the League, far from being devoted to " educating " in the sense of presenting both sides of the matter in which it was interested, advocated its side. The League's literature was directed very largely to political matters rather than educational objects. It may be, as argued by petitioner and quoting I. T. 1224, G. B. 1-1, p. 256, that a league organized to "bring about a fair and open-minded consideration of political questions " comes within the statute, but in this case it is obvious from the League's literature that it was not engaged in such a pursuit; it was decidedly partisan, in advocating a " new social order."
The highly controversial nature of the League's aim — " a new social order based on production for use and not for profit " — is manifest from the mere statement of it and is sufficient to bring the case within the rule laid down in the Fales and Slee cases supra. In its campaign for this " new social order " the League advocated drastic political and economic changes which are directly at odds with existing economic theories and practices upon which society is founded in this country and which pervade our system of Government, and it is hardly to be presumed that Congress intended to foster such institutions by including them within the classification of institutions which are encouraged as a matter of public policy and as " aids of good government." In re Moses Estate, 123 N. Y. S. 443.
Reviewed by the Board.
Decision will be entered for the respondent.