Opinion ID: 657239
Heading Depth: 2
Heading Rank: 6

Heading: Donations of Stolen Property and Charitable Deductions

Text: 47
48 Woodley maintains that the court erred by denying his motion for a judgment of acquittal on the tax counts. He relies on James v. United States, 366 U.S. 213, 81 S.Ct. 1052, 6 L.Ed.2d 246 (1961), to argue that even if he stole the Imperial stock, he is entitled to deduct its donation as a charitable contribution. Such deductions are governed by 26 U.S.C. Sec. 170. The district court ruled that a charitable deduction for stolen property was legally impossible. We agree. We review under the same standard applied to a sufficiency of the evidence challenge. United States v. Shirley, 884 F.2d 1130, 1134 (9th Cir.1989). 49 The tax court has held that a taxpayer must own the property before donating it to a charity and taking the appropriate deduction. Hunter v. Commissioner, 51 T.C.M. 1533, 1536, 1986 WL 21585 (1986). Further, [t]he right to beneficial enjoyment of the property, rather than possession of the property, determines whether a taxpayer is recognized as the owner of property for Federal tax purposes. Id. 50 Woodley's reading of our holding in Sammons v. Commissioner, 838 F.2d 330 (9th Cir.1988), is too broad. There, the taxpayers bought eagle artifacts, donated them and claimed a charitable deduction. We held that the taxpayers had a sufficient ownership interest in the artifacts. We noted that the sale may have been illegal and voidable, but no one [was] seeking, or defending, enforcement of the contract of purchase or the subsequent gift. Id. at 336. 51 In contrast, the government showed that Woodley had acquired the Imperial stock fraudulently. Because he stole it, he did not have the rightful ownership required for a charitable deduction. 52 Allowing a charitable deduction for stolen property contravenes public policy and would encourage thievery. When Congress is silent, we have upheld a disallowance when allowing a deduction would frustrate public policy that bars specific conduct. Id. 53
54 Woodley says the district court inadequately instructed the jury on stock ownership. Specifically, he says that the court omitted the subjective intent requirement and erred by rejecting his proposed instruction. 55 The court gave modified instructions that allowed the jury to consider Woodley's subjective good faith belief that he was entitled to the deduction. The court explained to the jury that Woodley need not possess a stock certificate to prove ownership. Rather, he rightfully owned the stock if he purchased or agreed to purchase it from Lynn. 56 We review de novo whether the court's instructions adequately presented the defendant's theory. United States v. Mason, 902 F.2d 1434, 1438 (9th Cir.1990). If instructions fairly and adequately cover the elements of an offense, we review their precise formulation for an abuse of discretion. United States v. Lunstedt, 997 F.2d 665 (9th Cir.1993). 57 Woodley has not told us why the court's instructions are inadequate. The court allowed him to testify and argue his defense theory. The court's instructions covered the issues sufficiently to guide the jury.