120 120 Tech. Adv. Mem. 9423001.
121 121 Page v. Commissioner, 58 F.3d 1342 (8th Cir. 1995). Likewise, Gunkle v. Commissioner, 104 T.C.M. (CCH) 527 (2012).
122 122 Ruddel v. Commissioner, 71 T.C.M. (CCH) 2419 (1996). Also, Lombardo v. Commissioner, 50 T.C.M. (CCH) 1374 (1985). These matters can operate in reverse. In one instance, an individual attempted to deduct payments made to two charities as business expenses; the court held that they were not business expenses but were charitable gifts—then disallowed the charitable deduction because the individual did not itemize deductions. Irwin v. Commissioner, 72 T.C.M. (CCH) 1148 (1996).
123 123 Pollard v. Commissioner, 105 T.C.M. (CCH) 1249 (2013). Cf. McGrady v. Commissioner, 112 T.C.M. (CCH) 688 (2016) (where the court rejected the IRS's argument that certain transfers were part of a quid pro quo arrangement).
124 124 Wendell Falls Development, LLC v. Commissioner, 115 T.C.M. (CCH) 1197 (2018), supp. by 116 T.C.M. (CCH) 504 (2018).
125 125 Triumph Mixed Use Investments III, LLC v. Commissioner, 115 T.C.M. (CCH) 1329 (2018). A court declined to resolve a quid pro quo issue in the charitable giving context on summary judgment (Pesky v. United States, 2013 BL 181354 (D. Id., July 8, 2013)).
126 126 Emanouil v. Commissioner, T.C. Memo. 2020–120 (2020).
127 127 Fakiris v. Commissioner, 113 T.C.M. (CCH) 1555 (2017).
128 128 Id. at 1561.
129 129 It is hard to see why this arrangement, admittedly clumsily structured, gave the company an element of dominion and control over the property, rendering the gift conditional in some inappropriate fashion. The company did not derive any benefit from its ability to transfer the property, which was always destined for charity.
130 130 IRC § 164(b)(6). This provision was added to the IRC on enactment of fiscal year 2018 budget reconciliation legislation (informally known as the Tax Cuts and Jobs Act) (Pub. L. No. 115-97, 115th Cong., 1st Sess. (2017) § 11042). This limitation applies to tax years beginning after December 31, 2017, and before January 1, 2026.
131 131 REG-112176-18 (Aug. 13, 2018). This proposal, which was foreshadowed by Notice 2018-54, 2018-24 I.R.B. 750 (June 11, 2018), also includes similar rules in connection with payments made by estates and trusts.
132 132 T.D. 9864 (June 11, 2019). Proposed regulations state that the quid pro quo principle is equally applicable where the donor expects to receive a benefit from a third party (REG-107431-19 (Dec. 13, 2019)).
133 133 Reg. § 1.170A-1(h)(3)(i).
134 134 Reg. § 1.170A-1(h)(3)(vi).
135 135 Reg. § 1.170A-1(h)(3)(ii). See § 3.1(b). Indeed, this proposal would not change existing tax treatment of law outside the charitable context, such as a state tax credit program relating to amounts paid by businesses (e.g., Information Letter 2018-0030 (Sep. 18, 2018)).
136 136 The Department of the Treasury and the IRS issued a notice providing a safe harbor for payments made by certain individuals (Notice 2019-12, 2019-27 I.R.B. 57). Under this safe harbor, an individual who itemizes deductions and makes a payment to a charitable organization in return for a state or local tax credit may treat the portion of the payment that is or will be disallowed as a charitable contribution deduction as a payment of state or local tax for purposes of the deduction cap. This disallowed portion of the payment may be treated as a payment of state or local tax in connection with the cap when and to the extent an individual applies the state or local tax credit to offset the individual's state or local tax liability.The IRS ruled that, if a C corporation makes a payment to or for the use of a charitable organization and receives or expects to receive a tax credit that reduces a state or local tax imposed on the corporation in return for the payment, the corporation may treat the payment as meeting the requirements for an ordinary and necessary business expense to the extent of the credit. The same outcome results where the payment is made by a business entity other than a C corporation that is regarded for federal income tax purposes as separate from its owners and where the credit pertains to a tax other than a state or local income tax. (Rev. Proc. 2019-12, 2019-4 I.R.B. 401.)
137 137 Reg. § 1.170A-1(b)(2).
138 138 Reg. § 1.170A-1(h)(4)(i). This position is based on case law (e.g., Singer Co. v. United States, 449 F.2d 413 (Ct. Cl. 1971)) and IRS guidance (e.g., Rev. Rul. 67-246, 1967-2 C.B. 104). Moreover, a person's expectation of a substantial benefit in return, from any source, has been held to reflect a lack of donative intent on the part of the donor (see § 2.1(a)) (e.g., Ottawa Silica Co. v. United States, 699 F.2d 1124 (Fed. Cir. 1983)).
139 139 See § 3.7.
140 140 Blake v. Commissioner, 697 F.2d 473 (2nd Cir. 1982), aff'g 42 T.C.M. (CCH) 1336 (1981).
141 141 Id., 697 F.2d at 480.
142 142 Id.
143 143 Rev. Rul. 80-77, 1980-1 C.B. 56.
144 144 Id.
145 145 Id.
146 146 Rev. Rul. 67-446, 1967-2 C.B. 119. In this instance, the benefits to the merchants and property owners were considered incidental in comparison to the benefits accruing to the public. Also Rev. Rul. 79-323, 1979-2 C.B. 106; Rev. Rul. 69-90, 1969-1 C.B. 63.
147 147 Rev. Rul. 74-246, 1974-1 C.B. 130.
148 148 Rev. Rul. 81-307, 1981-2 C.B. 78. Again (see supra note 146), the benefit to the donor was deemed incidental in comparison to the benefits accruing to the public.
149 149 Rev. Rul. 75-66, 1975-1 C.B. 85.
150 150 Priv. Ltr. Rul. 9447028.
151 151 Priv. Ltr. Rul. 9729024.