Court Opinion

ID: 9479633
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:23:56.568168+00
Date Added: 2024-06-11T17:47:10.178641
License: Public Domain

MERRITT, Chief Judge,
dissenting.
In this tax case, the Phi Delta Theta fraternity has adequate records showing precisely how much money was spent or “set aside” during fiscal 1978 for publication of its national alumni magazine, The Scroll: $96,374.21. The remaining income ($18,262.79) from The Scroll Fund or Trust was not spent at all that year. There is no contention that money from the Trust not spent or “set aside” for The Scroll in 1978, or any other year for that matter, was spent or “set aside” for non-tax-exempt purposes.
Under these circumstances it seems to me that The Scroll Fund or Trust is “set aside” for publication of the magazine and other tax-exempt purposes and the $96,374 in publication expense was “set aside” for the magazine. There is no evidence that any funds from the Trust have been used for anything other than the magazine and other exempt fraternal purposes. Thus the money used was “set aside” by any reasonable meaning of that purpose.
*1309The magazine itself simply carries news about the fraternity, its local chapters and its alumni, as well as articles on subjects of general concern. It is no different in this respect from hundreds of college alumni magazines across the country which receive tax-exempt treatment because they fit within the definition of § 170(c)(4), which requires that the publication funds be “used exclusively for ... literary or educational purposes.”
After reading the Court’s opinion and the tax law carefully several times, I do not yet understand why the Court believes the money used for the magazine is not “set aside” for “literary or educational” purposes. Accordingly, I dissent.