Deductibility of Contributions to Religious Institutions

59 Pages Posted: 22 Apr 2004

See all articles by Allan J. Samansky

Allan J. Samansky

Ohio State University (OSU) - Michael E. Moritz College of Law


In Hernandez v. Commissioner, 490 U.S. 680 (1989), the Supreme Court held that payments by Scientologists to their local churches for auditing and training, which are required religious practices, were not deductible as charitable contributions because they were made in exchange for specific services. Four years later the Internal Revenue Service "walked away" from its victory. Since 1993 the IRS has allowed a deduction for payments that are identical to those the Supreme Court held to be nondeductible in Hernandez, but has never explained its rationale. As Sklar v. Commissioner, 282 F.3d 610 (9th Cir. 2002), has shown, adherents of mainstream religions are now claiming that they are being treated unfairly compared to the Scientologists.

The law concerning deductibility of charitable contributions to religious institutions is unclear. This article explores the issues raised by Hernandez and provides a framework for determining deductibility of "quid pro quo contributions." It recommends that payments for auditing should be deductible, but payments for training should not be. The failure by all those involved in the Hernandez litigation to distinguish between auditing and training may be one of the reasons that the Supreme Court decision has been so unsatisfactory.

Keywords: income taxation, hernandez, charitable contributions

JEL Classification: K34

Suggested Citation

Samansky, Allan J., Deductibility of Contributions to Religious Institutions. Virginia Tax Review, 2004. Available at SSRN:

Allan J. Samansky (Contact Author)

Ohio State University (OSU) - Michael E. Moritz College of Law ( email )

55 West 12th Avenue
Columbus, OH 43210
United States

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