Davis v. United States

495 U.S. 472 (1990)

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Nature of the Case

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Facts

P, and their sons, Benjamin and Cecil, are members of the Church. The Church operates a worldwide missionary program involving 25,000 persons each year. Most of these missionaries are young men between ages 19 and 22. If the Church determines that a candidate is qualified to become a missionary, the president of the Church sends a letter calling the candidate to missionary service in a specified geographical location. A follow-up letter from the missionary department lists the items of clothing the missionary will need, provides specific information relating to the mission, and sets forth the estimated amount of money needed to support the missionary service. This amount varies according to the location of the mission and reflects an estimate of the amount the missionary will actually need. The missionary's parents provide the necessary funds to support their son or daughter during the period of missionary service. If they are unable to do so, the Church will locate another donor from the local congregation or use money donated to the Church's general missionary funds. Benjamin and Cecil both applied to become missionaries. Both were accepted, and Ps notified their bishop that they would provide the funds requested by the Church to meet their sons' mission expenses. Both sons made a commitment to use the money only in accordance with the Church's instructions. Ps transferred the monies directly to their sons' checking accounts. Ps claimed charitable contributions of the $3,480.89 and $4,882 paid to their sons during the missionary service. The IRS disallowed deductions. Ps sued. The district court ruled in favor of the United States. It rejected Ps' claimed deduction for unreimbursed expenditures because Ps were not themselves performing donated services, and it held that Ps' payments to their sons were not 'for the use of' the Church because the Church lacked sufficient possession and control of the funds. The Court of Appeals affirmed. The Court of Appeals held that contributions are deductible only when the recipient charity exercises control over the donated funds. The Court of Appeals concluded that the Church lacked actual control over the disposition of the funds, and thus, they were not deductible. The Supreme Court granted certiorari.