Court Opinion

ID: 6910260
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:19:44.754775+00
Date Added: 2024-06-11T16:06:29.612362
License: Public Domain

O’CONNELL, J.,
dissenting.
The majority of the court interprets ORS 316.340 to mean that property transferred directly to the X church is deductible, but that property transferred to a trustee in trust for the X church is not. Why does the interposition of a trust disqualify the gift as a charitable contribution under the statute? The majority opinion points to no legislative policy which would be served by making a distinction between a direct gift and a gift in trust where the donor retains no control over the trust and where the charity gets the same interest under both transfers. Nor does the majority explain why a distinction was originally made by the internal revenue service and the tax court between a contribution “to” a charity and a contribution “for the use of” a charity.
The cases relied upon by the majority in which the distinction is made do not give any reason for making the distinction. Reasons can be suggested for making a distinction for tax purposes between an outright gift and a gift in trust where the donor retains an economic benefit through the reservation of control over *466the trust. And even where no control is retained it would not be unreasonable to provide that in the ease of a trust the deduction should be reduced a certain percentage to account for the fact that the money expended out of the trust for administration costs does not reach the donee.① Even that reason would not be applicable to the trust in the present ease because the cost of administering the trust could not diminish the corpus.
The majority bases its interpretation of ORS 316.340 on the sole ground that the federal rulings had recognized a distinction between “to” and “for the use of.” Those earlier rulings gave no rationale for the distinction and are at best questionable. Moreover, as the majority opinion indicates, the federal tax statutes were soon changed to permit a deduction where the gift was in trust for the charity. Thus the majority says, in effect, we can not think of any policy which the legislature may have had in mind in enacting ORS 316.340, nor can we detect any policy which could have prompted the rulings under the federal statute, but because the distinction was made under the federal statute, no matter how erroneously, we must assume that the Oregon legislature intended to perpetuate it and this in spite of the fact that the federal statutes were changed, it seems, to eliminate the erroneously created distinction.②
There is no rule of statutory interpretation which requires us to assume that the legislature intends to *467adopt every distinction made by federal administrative tribunals in the interpretation of federal statutes. The word “to” in ORS 316.340 is equally adequate to describe a transfer in trust as it is to describe a direct transfer. It is quite possible that the phrase “or for the use of” was not adopted in ORS 316.340 because the draftsman regarded it as redundant. This is not to say that ORS 316.340 must be construed to make deductible all gifts in trust for charitable purposes. The statute could reasonably be construed to disqualify a transfer in trust for a charity as a deduction where the settlor retains economic control over the corpus. But to interpret the statute, as the majority does, to mean that an uncontrolled gift to a charity is deductible but that an uncontrolled gift to a charity by way of a trust is not is the worst kind of mechanistic jurisprudence.

 This may be the explanation for the differentiation now made in 26 USCA § 170(b) (1) (A) which provides that a taxpayer may deduct up to 10 percent more of his adjusted gross income for gifts made directly to certain types of charities.

 As I have indicated, later federal legislation makes a distinction giving favored treatment to the outright gift but not wholly disqualifying a gift in trust to the charity.