Court Opinion

ID: 4595812
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:15:47.478828+00
Date Added: 2024-06-11T07:51:30.474870
License: Public Domain

ROSE D. FORBES, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Forbes v. CommissionerDocket No. 10236.United States Board of Tax Appeals7 B.T.A. 209; 1927 BTA LEXIS 3231; June 7, 1927, Promulgated *3231  The American School Citizenship League was during the year 1921 an association organized and operated exclusively for educational purposes and a contribution of $4,000 made thereto by petitioner in 1921 was a proper deduction from gross income.  Kenneth Howes, Esq., for the petitioner.  D. D. Shepard, Esq., for the respondent.  LITTLETON*209  The Commissioner determined a deficiency in income tax of $1,358.69 for the calendar year 1921.  He held that the American School Citizenship League, to which petitioner made a contribution of $4,000, was not operated exclusively for educational purposes and disallowed the contribution made by petitioner as a deduction from her gross income, and this action on his part is assigned as error.  FINDINGS OF FACT.  Petitioner is a resident of Milton, Mass.  In the year 1921 she contributed $4,000 to the American School Citizenship League, which is a voluntary unincorporated association organized in 1908 by a group of individuals.  It is an allied organization of the National *210  Educational Association and in 1921 the National Educational Association appointed a committee to cooperate with the American*3232  School Citizenship League in carrying on its activities.  The object of the American School Citizenship League, as expressed in article II of its constitution, is "To develop an American citizenship which will promote a responsible world democracy and a real cooperation among the nations." Its constitution provides as officers a president, two or more vice presidents, a secretary, a treasurer, and a body of fifty or more counsellors, such officers constituting the board of managers of the League.  This board elects from its number ten persons who, with the president, secretary and treasurer, constitute the executive committee.  The board of managers meets once a year.  Regular meetings of the executive committee are held and special meetings may be called from time to time.  The League has a counsel consisting of approximately one hundred persons engaged in educational work throughout the country.  Persons who make annual contributions of $25 or more are enrolled as members of the League.  Other persons who may make a contribution at any time in excess of $25 are enrolled as patrons.  The association has no stockholders.  It has no income except such as is derived from public contributions*3233  or from members and small sums realized from its publications.  The League has branch organizations in various States, which it designates as State Teachers' Associations.  These branch organizations are composed of various state board educational officers and teachers.  In the interest of education and to aid teachers throughout the country in the more efficient distribution of their duties, as such, the League has had prepared by its members and officers a number of books which have been published by the League and are exclusively used in schools.  An "American Citizenship Course in United States History" and a "Course in Citizenship and Patriotism" are so prepared and published, and used by adoption of many States in public schools.  "The studies included in these volumes are an attempt to find materials in American history that can be presented to the American child in such a way as to produce a definite result, - a result that will be evidenced in a better understanding of our National life, a truer sense of historical value, a keener appreciation of our international obligations, and a nobler conception of American Citizenship." The American School Citizenship League was*3234  organized and during the year 1921 was operated exclusively for educational purposes.  No part of the net earnings of the League inured to the benefit of any private stockholder or individual.  Petitioner's net income for the year 1921 computed without the benefit of the deductions allowed by section 214(a)(11) of the *211  Revenue Act of 1921 amounted to $62,974.45.  The contribution of $4,000 by her to the American School Citizenship League, together with all other charitable contributions made by her in the year 1921 totaled less than 15 per cent of her net income for that year.  OPINION.  LITTLETON: From the evidence submitted, the Board is of the opinion that the American School Citizenship League was during the year 1921 an association organized and operated exclusively for educational purposes.  No part of the net earnings of the League inured to the benefit of any private stockholder or individual.  The contribution of $4,000 made by petitioner to this League in the year 1921 was therefore a proper deduction from her gross income.  Judgment will be entered on 15 days' notice, under Rule 50.