The Community Income Theory of the Charitable Contributions Deduction
Johnny Rex Buckles
University of Houston Law Center
Indiana Law Journal, Vol. 80, p. 947, 2005
University of Houston Law Center No. 2005-A-14
The charitable contributions deduction, a longstanding yet controversial feature of the Internal Revenue Code, has been justified under subsidy theories and tax-base theories. Focusing on the latter, this Article presents and explains a new tax-base theory in support of the charitable contributions deduction - the community income theory. This theory posits that some income, designated as community income, is properly excluded from the personal tax income base because it is more naturally attributed to the community than to the individual members of the community. Adopting the presumption that the community generally should be treated as a tax-exempt entity, this Article argues that both the charity income tax exemption and the charitable contributions deduction may be defended on the basis that they reflect the theoretically correct taxation of community income.
Number of Pages in PDF File: 41
Keywords: income tax exemption, charitable organization, charity, Section 501(c)(3), charitable contributions deduction, charitable contribution deduction, income tax theory, community income
Date posted: November 11, 2005
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