Court Opinion

ID: 6496303
Source: CourtListenerOpinion
Date Created: 2022-06-29 18:00:20.044243+00
Date Added: 2024-06-11T08:48:54.412462
License: Public Domain

Case: 21-60679      Document: 00516375624         Page: 1     Date Filed: 06/29/2022

           United States Court of Appeals
                for the Fifth Circuit                                  United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                          June 29, 2022
                                   No. 21-60679                          Lyle W. Cayce
                                                                              Clerk

   Joe Alfred Izen, Jr.,

                                                            Petitioner—Appellant,

                                       versus

   Commissioner of Internal Revenue,

                                                            Respondent—Appellee.

                          Appeal from a Decision of the
                            United States Tax Court
                            Tax Court No. 28358-12

   Before Higginbotham, Haynes, and Wilson, Circuit Judges.
   Per Curiam:
          Joe Alfred Izen, Jr. appeals the denial of an income tax deduction he
   claimed for a charitable donation of an aircraft. Because Izen failed to comply
   with the statutory requirements for such a deduction, we affirm the judgment
   of the Tax Court.
                                         I.
          In 2012, the Commissioner of Internal Revenue notified Izen that he
   had deficiencies for the 2009 and 2010 tax years. Izen petitioned for a
   redetermination by the Tax Court. In 2014, Izen filed an amended petition
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                                          No. 21-60679

   and, for the first time, argued that he was entitled to a deduction of $338,080
   for the charitable donation of his 50% interest in an airplane to the Houston
   Aeronautical Heritage Society (the “Society”).
          On January 23, 2016, Izen moved for summary judgment, seeking a
   declaration that he was entitled to the deduction. On March 9, 2016, the Tax
   Court denied Izen’s motion, concluding that material fact issues remained.
   Izen then moved for leave to file a second amended petition and he filed an
   amended tax return for 2010 on IRS Form 1040X, attaching further materials
   to support his claimed deduction. The Tax Court ordered the Commissioner
   to respond to Izen’s motion, and on May 27, 2016, the Commissioner
   responded and moved for partial summary judgment as to the deduction,
   arguing that Izen failed to comply with 26 U.S.C. § 170(f). Izen filed a second
   motion for summary judgment on July 19, 2016, arguing that his Form 1040X
   established that he was entitled to the deduction.
          The Tax Court determined that Izen was not entitled to the
   deduction, denying his motion for partial summary judgment and granting
   partial summary judgment to the Commissioner. 1 After stipulations between
   the parties that resolved the remaining issues, the Tax Court then entered a
   final decision determining that Izen had deficiencies of $13,060 for 2009 and
   $56 for 2010. Izen timely appealed to this Court, challenging only the denial
   of a deduction for his donation of his interest in the plane.
                                               II.
          We have jurisdiction to review decisions of the Tax Court under 26
   U.S.C. § 7482. We review de novo the Tax Court’s grant of summary

          1
              Izen v. Comm’r, 148 T.C. 71 (2017).

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   judgment. 2 Summary judgment is appropriate if “there is no genuine dispute
   as to any material fact and [ ] a decision may be rendered as a matter of law.” 3
   “We review the Tax Court’s interpretation of the applicable law and statutes
   de novo.” 4
                                                  III.
          Section 170 of the Internal Revenue Code governs deductions for
   charitable      contributions. 5       Section 170(f)(8)    sets    out   substantiation
   requirements for certain contributions and § 170(f)(12) sets out further rules
   for the contributions of qualified vehicles. To claim a charitable contribution
   deduction, a taxpayer must substantiate the validity of the donation and its
   valuation. 6 Where the contribution’s value exceeds $5,000, the taxpayer
   must also provide a qualified appraisal. 7 For a contribution of a qualified
   vehicle, including airplanes, whose value exceeds $500, the taxpayer must
   provide contemporaneous written acknowledgment from the donee
   organization of the contribution, including the name and taxpayer
   identification       number       of     the     donor. 8   An     acknowledgment     is
   contemporaneous if it is provided by the donee organization within thirty

          2
              Jones v. Comm’r, 338 F.3d 463, 466 (5th Cir. 2003).
          3
              Tax. Court R. Prac. & Proc. 121(b).
          4
              Ragan v. Comm’r, 210 F.3d 514, 517 (5th Cir. 2000).
          5
              26 U.S.C. § 170.
          6
              Id. § 170(f)(8).
          7
              Id. § 170(f)(11)(C).
          8
              Id. § 170(f)(12)(B).

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   days of the contribution. 9 Further, the donee organization must provide the
   IRS with the information contained in the acknowledgement. 10
           The Commissioner was entitled to summary judgment as Izen was
   disallowed from claiming the deduction as a matter of law. Izen failed to
   provide a contemporaneous written acknowledgment from the donee
   organization that satisfied the requirements of 26 U.S.C. § 170(f)(12)(B).
           Section 170(f)(12)(A)(i) disallows the deduction unless the requisite
   contemporaneous written acknowledgment is included in the tax return
   claiming the deduction. Here, we look to Izen’s Form 1040X, as that was the
   first tax return where Izen claimed the deduction.
           Izen did not provide a satisfactory contemporaneous written
   acknowledgement with his Form 1040X. Izen included a letter dated
   December 30, 2010 from the Society discussing the donation of the airplane,
   but the letter was addressed to Philippe Tanguy, not Izen. The letter does not
   mention Izen and does not provide his taxpayer identification number. The
   letter cannot substantiate the contribution of the airplane under
   § 170(f)(12)(B)(i). 11 Izen also included a copy of the donation agreement
   between him, Tanguy, and the Society, but the agreement fails to satisfy
   § 170(f)(12)(B)(i) as it lacks Izen’s taxpayer identification number. Finally,

           9
                Id. § 170(f)(12)(C).
           10
                Id. § 170(f)(12)(D).
           11
              Izen asks us to also examine a different letter from the Society, addressed to him
   but not attached to his Form 1040X, the relevant filing for our analysis. Because this
   alternate letter was not attached to Izen’s Form 1040X, we cannot consider it; even if we
   could, it similarly lacks his taxpayer identification number.

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   Izen attached a Form 8283 to his Form 1040X, but the Form 8283 did not
   include his taxpayer number. 12
           Izen argues that he substantially complied with the requirements and
   that the documents he provided should be read together with the return to
   substantiate his claimed deduction. The doctrine of substantial compliance
   may support a taxpayer’s claim where he or she acted in good faith and
   exercised due diligence but nevertheless failed to meet a regulatory
   requirement. 13 We cannot accept the argument that substantial compliance
   satisfies statutory requirements. 14 Congress specifically required the
   contemporaneous            written     acknowledgment          include      the     taxpayer
   identification number, but that is lacking here. 15
                                                IV.
           We AFFIRM the judgment of the Tax Court, which denied Izen’s
   partial motion for summary judgment, granted the Commissioner’s partial

           12
              Further, Izen’s Form 8283 was not a contemporaneous written acknowledgment
   by the donee organization as it was not signed by the Society until 2016, well past thirty
   days of the donation. Izen argues that a written acknowledgement is contemporaneous if
   produced within thirty days of the filing, but this argument conflicts with the clear statutory
   definition. Under 26 U.S.C. § 170(f)(12)(C), an acknowledgment is contemporaneous if it
   is provided by the donee organization within thirty days of the contribution.
   Section 170(f)(12)(C) does not reference the timing of the taxpayer’s filing.
           13
                McAlpine v. Comm’r, 968 F.2d 459, 462 (5th Cir. 1992).
           14
             See Addis v. Comm’r, 374 F.3d 881, 887 (9th Cir. 2004) (holding that the plain
   language of 26 U.S.C. § 170(f)(8) required a total denial of a charitable deduction where
   the taxpayer failed to comply with the statute; § 170(f)(8) is substantially similar to the
   provisions of § 170(f)(12) at issue here). See also French v. Comm’r of Internal Revenue, 111
   T.C.M. (CCH) 1241 (2016) (“The doctrine of substantial compliance does not apply to
   excuse compliance with the strict substantiation requirements of section 170(f)(8)(B).”).
           15
            American Jobs Creation Act of 2004, Pub. L. 108-357, § 884, 118 Stat. 1418, 1633–
   34 (2004).

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   motion for summary judgment, and ultimately granted a final judgment in the
   Commissioner’s favor.

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