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ERIC A. POLLARD, ET AL., Pollard v. CommissionerDocket Nos. 9634-78, 12467-79, 13797-79, 5137-80, 5209-80, 11203-80, 11204-80, 11326-80, 11557-80, 12091-80, 15293-80, 15294-80, 3329-81, 7482-81, 25426-81, 25428-81, 25496-81, 25610-81, 25615-81, 7530-82, 12738-82, 19015-82, 19263-82, 19272-82, 19281-82, 19285-82, 19291-82, 19833-82, 19887-82, 1945-83, 2042-83, 2138-83, 2178-83.
United States Tax Court T.C. Memo 1984-536; 1984 Tax Ct. Memo LEXIS 137; 48 T.C.M. (CCH) 1303; T.C.M. (RIA) 84536;October 4, 1984. Lee Boothby, for the petitioners.Julian A. Fortuna ,GOFFEMEMORANDUM FINDINGS OF FACT AND OPINION
GOFFE,
Judge: The Commissioner determined deficiencies in petitioners' Federal income tax and additions to tax as follows:
*141Additions To Tax Petitioner Docket No. Year Deficiency Amount Code Sec. Eric A. Pollard 9634-78 1976 $3,415.00 19272-82 1979 3,276.00 $163.80 6653(a) Kenneth R. Smith 12467-79 1976 2,037.54 509.39 6651(a)(1) 101.88 6653(a) 76.04 6654 John Wesley Foshee, Jr. 13797-79 1976 438.34 1977 765.00 Phillip R. Brooks 5137-80 1977 2,086.00 and Sharon O. 25428-81 1978 2,736.00 137.00 6653(a) Brooks 2042-83 1980 3,350.00 167.50 6653(a) 167.50 6651(a)(1) David D. Sutton 5209-80 1977 3,938.00 12738-82 1978 5,277.46 263.87 6653(a) 1979 5,622.34 1,395.59 6651 281.12 6653(a) Larry F. McEver 11203-80 1977 2,913.00 Harold H. Johnston 11204-80 1977 3,074.00 and Josephine E. 25426-81 1978 3,843.00 192.00 6653(a) Johnston 19281-82 1979 4,753.00 237.65 6653(a) James F. Thompson 11326-80 1976 1,347.00 67.00 6653(a) 23.63 6654(a) 25610-81 1978 1,863.00 226.00 6651(a)(1) 93.00 6653(a) 19887-82 1979 2,398.77 119.94 6653(a) 1980 3,094.05 154.70 6653(a) Michael W. Barton 11557-80 1976 1,562.00 391.00 6651(a)(1) 78.00 6653(a) 58.00 6654 1977 1,470.00 368.00 6651(a)(1) 74.00 6653(a) 54.00 6654 Robert E. Dollar, Jr. 12091-80 1977 1,811.00 and Linda Dollar Robert E. Dollar, Jr. 19263-82 1979 2,071.00 104.00 6653(a) 1980 3,039.00 152.00 6653(a) Robert E. McCurry 15293-80 1976 3,741.00 935.00 6651(a)(1) 187.00 6653(a) 1977 4,423.00 1,106.00 6651(a)(1) 221.00 6653(a) Evelyn E. McCurry 15294-80 1977 3,200.00 800.00 6651(a)(1) 160.00 6653(a) Robert D. McCurry and 3329-81 1977 1,965.00 Phyllis E. McCurry 1978 2,474.00 2138-83 1980 2,919.00 145.95 6653(a) Robert D. May and 7482-81 1977 921.00 46.00 6653(a) Jeanne W. May Roger D. Schroeder 25496-81 1978 5,072.00 254.00 6653(a) and Nancy L. 19285-82 1979 3,980.00 199.00 6653(a) Schroeder 1980 5,457.00 273.00 6653(a) Philip D. Thomason 25615-81 1978 3,004.00 150.00 6653(a) Robert D. May 7530-82 1978 2,707.00 135.35 6653(a) 79.14 6654(a) 1979 10,559.00 527.95 6653(a) 431.59 6654(a) Phillip R. Brooks 19015-82 1979 4,513.67 1,118.42 6651 225.68 6653(a) Philip D. Thomason and 19291-82 1979 2,060.00 103.00 6653(a) Anita J. Thomason 1945-83 1980 2,427.00 121.35 6653(a) Alan D. Egerdahl and 19833-82 1979 2,092.00 104.60 6653(a) Karen L. Egerdahl 1980 2,715.00 135.75 6653(a) Eric A. Pollard and 2178-83 1980 3,798.00 189.90 6653(a) Lee F. Pollard After concessions by the parties, the issues for decision are:
(1) whether petitioners failed to report gross income during the taxable years in issue in the amounts determined by the Commissioner;
(2) whether petitioners are entitled to deductions for charitable contributions pursuant to section 170(c) for any of the years in issue;
(3) whether petitioners are liable for Federal Insurance Contributions Act (FICA) taxes for the years in issue;
(4) whether petitioners are entitled to deductions for social security taxes for the years in issue;
(5) whether petitioners are liable for self-employment taxes for the years in issue; and
(6) whether petitioners are liable for the additions to tax determined by the Commissioner for the years in issue.
FINDINGSOF FACT
For convenience and organizational purposes, we have divided the Findings of Fact into a general findings of fact applicable to all petitioners and individual findings of fact which pertain only*142 to the indicated petitioners.
Some of the facts have been stipulated. The stipulations of facts, supplemental stipulation of facts and second supplemental stipulation of facts and accompanying exihibits are so found and incorporated herein by reference.
General All of the petitioners resided in Georgia when they filed their respective petitions in this consolidated case.
The Calvary Temple Church of East Point, Georgia, was formed in 1958. On or about August 31, 1960, Calvary Temple, Inc. (hereinafter referred to as "Calvary Temple," "Calvary Temple Church" or the "church"), was incorporated as "a church or religious society." The religious tenets of Calvary Temple are evangelical in nature. The King James version of the Holy Bible serves as the church's constitution and by-laws. Petitioner Robert E. McCurry is its first and only pastor. Regular weekly services are held at the church. At the time of trial, the church had approximately 300 members. All of the petitioners in this consolidated case are membersof the Calvary Temple Church.
In addition to conducting regular weekly services at the church, petitioner Robert E. McCurry advances Calvary Temple's*143 evangelical crusade through other mediums. The church operates a "Go Ye For Christ Missionary Mobile Chapel" in the greater Atlanta, Georgia, metropolitan area. Pastor McCurry travels throughout the United States on missionary activities. Calvary Temple Church has operated a daily radio ministry. It also prepares taped sermons for individuals who are unable to attend its services.Finally, the Calvary Temple Church publishes the weekly newsletter "Temple Times." Although the "Temple Times" publication normally contains traditional evangelical religious articles, it has, it recent times and with increasing regularity, also included numerous articles concerning taxes, the Internal Revenue Service, governmental intrusion upon citizens' lives, religious instruction in public schools, accreditation of churchsponsored schools and religious freedom. The newsletter often contains copies of letters from congregation members to various public officials concerning these topics and frequently urges its readers to write to other public officials. The "Temple Times" has included articles entitled "Internal Revenue Service Must Be Abolished," "Fear the IRS" and "IRS Seeks Dictatorial Control*144 of Churches and their Ministers."
Petitioner Phillip Brooks was paid by his employer for such services with checks whose named payee was "Phillip Brooks," and no other person had a right to cash these*168 checks.
Petitioners Phillip Brooks and Sharon Brooks each executed a "Statement of Christian Faith and Application" which are dated January 1, 1977, and February 20, 1978, respectively. Petitioner Phillip Brooks executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is dated January 1, 1977, and purports to convey all of his current and future real and personal property holdings to the "Brooks Christian Order," which is designated as "an integrated auxiliary of Calvary Temple." Although petitioner Sharon Brooks signed this latter document as petitioner Phillip Brooks' spouse, she did not, under the terms of the agreement, make any similar gifts of her property or undertake a vow of poverty.
Petitioners Phillip Brooks and Sharon Brooks, acting as officers of the Brooks Christian Order, signed a pre-printed "Covenant" dated January 1, 1977. In a document also dated January 1, 1977, these same petitioners, again acting as officers of the Brooks Christian Order, adopted pre-printed by-laws for their order. During the taxable years 1977, 1978, 1979 and 1980, the Brooks Christian Order requested monthly allowances and allotments in the amounts of $1,093, $1,675, *169 $1,800 and $2,000, respectively.
During the taxable years 1977, 1978, 1979 and 1980, petitioners Phillip Brooks and Sharon Brooks contributed $2,328, $5,907, $4,231 and $3,670, respectively, to the Calvary Temple.
On or about September 22, 1978, petitioner Phillip Brooks executed a credit application with Fairburn Banking Company. On such application, petitioner Phillip Brooks listed his monthly gross income as $1,610 and made no mention of his vow of poverty or other religious undertakings. On or about July 13, 1979, petitioner Phillip Brooks executed an amendment to a loan application with the Federal Land Bank of Columbia. On such amendment, petitioner Phillip Brooks listed: (1) his income from employment with Delta Air Lines; (2) automobiles valued at $5,200; and (3) personal property valued at $4,000.He again made no mention of his vow of poverty or his other religious undertakings.
On or about April 10, 1973, petitioner Phillip Brooks filed a Form W-4, Emplkoyee's Withholding Allowance Certificate, with his employer on which he claimed three withholding allowances. Beginning with the taxable year 1977, petitioner Phillip Brooks filed numerous Forms W-4 with*170 his employer in which he claimed additional withholding allowances as follows:
Number of Withholding Date Allowances Claimed January 1, 1977 25 August 1, 1977 27 January 1, 1978 27 April 28, 1978 27 On or about May 1, 1980, petitioner Phillip Brooks filed a Form W-4 with his employer in which he claimed to be exempt from withholding.
Petitioners Phillip Brooks and Sharon Brooks filed joint Federal income tax returns for the taxable years 1977, 1978 and 1980. For the taxable year 1979, petitioner Phillip Brooks filed an individual Federal income tax return. On these returns, petitioners listed their occupations as members of a religious order. They did not report the receipt of any taxable wages during these years and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church. For the taxable years 1977, 1978, 1979 and 1980, petitioners claimed deductions on their returns for contributions to Calvary Temple Church in the amounts of $27,962.78, $20,169.76, $22,606.20 and $24,486.20, respectively. Finally, petitioner Phillip Brooks filed a claim for refund for the taxable years 1977 and 1978 for Federal Insurance*171 Contributions Act (hereinafter referred to as "FICA") taxes withheld from his wages.
The Commissioner determined that petitioner Phillip Brooks received taxable wages from Delta Air Lines, Inc., in the amounts set forth above for each of the taxable years in issue. The Commissioner also disallowed petitioners' claimed charitable contribution deductions for each of the taxable years in issue because it was not established that the amounts were, in fact, contributed to an organization within the purview of section 170. The Commissioner also rejected petitioner Phillip Brooks' claim that his wages were exempt from FICA taxes. Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
Petitioners Robert Dollar and Linda Dollar During the years in issue, petitioner Robert Dollar was employed by N.C.R. Corporation as an engineer and received the following wages as remuneration for his services:
Year Amount 1977 $16,952.53 1979 19,081.98 1980 23,230.19 Petitioner Robert Dollar was paid by his employer for such services with checks whose named payee was "Robert E. Dollar," and no other person had a right*172 to cash these checks.
Petitioner Robert Dollar executed an undated "Statement of Christian Faith and Application." He also executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is dated January 1, 1977, and purports to convey all of his current and future real and personal property holdings to the "Robert E. Dollar Religious Order," which is designated as "an integrated auxiliary of Calvary Temple." His wife, petitioner Linda Dollar, did not sign this latter document although a blank for her signature is present. Petitioner Robert Dollar also filed a form entitled "Statutory Notice Pursuant to I.R. Code, Section 3402(n)" with his employer.
Petitioner Robert Dollar signed a pre-printed "Covenant" dated January 1, 1977. In a document dated January 1, 1977, petitioners Robert Dollar and Linda Dollar, acting as officers of the "Robert E. Dollar Religious Order," adopted pre-printed by-laws for their order. During the taxable years 1977, 1979 and 1980, the Robert E. Dollar Religious Order requested monthly allowances and allotments in the amounts of $1,364.47, $1,591.70 and $1,889.85, respectively.
During the taxable years 1977 and 1979, petitioners Robert*173 Dollar and Linda Dollar contributed $1,495 and $305 to the Calvary Temple.
On or about September 22, 1977, petitioner Robert Dollar purchased a 1974 Chevrolet pickup truck and title to this vehicle was issued in the name of "Robert E. Dollar, Jr."
On or about September 21, 1978, petitioner Robert Dollar filed a Form W-4, Employee's Withholding Allowance Certificate, with his employer on which he claimed 22 withholding allowances.
Petitioners Robert and Linda Dollar filed joint Federal income tax returns for the taxable years 1977, 1979 and 1980. On these returns, petitioners listed their occupations as members of a religious order. They did not report the receipt of any taxable wages during these years and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church. For the taxable years 1977, 1979 and 1980, petitioners claimed deductions on their returns for contributions to Calvary Temple Church in the amounts of $60,656.36, $21,081.98 and $23,230.19, respectively. Finally, for all of the taxable years in issue, petitioner Robert Dollar filed a claim for refund of FICA taxes withheld from his wages.
The Commissioner determined*174 that petitioner Robert Dollar received taxable wages from his employer, N.C.R. Corporation, in the amounts set forth above.The Commissioner also disallowed petitioners' claimed charitable contribution deductions for each of the taxable years in issue because it was not established that the amounts were, in fact, contributed to an organization within the purview of section 170. The Commissioner also rejected petitioner Robert Dollar's claim that his wages were exempt from FICA taxes. Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
Petitioners Alan Egerdahl and Karen Egerdahl During the years in issue, petitioner Alan Egerdahl was employed by Federal Express Corporation as a courier and received the following wages as remuneration for his services:
Year Amount 1979 $20,157.48 1980 22,854.02 Petitioner Alan Egerdahl was paid by his employer for such services with checks whose named payee was "Alan D. Egerdahl," and no other person had a right to cash these checks.
Petitioners Alan Egerdahl and Karen Egerdahl each executed a "Statement of Christian Faith and Application" which*175 is dated January 1, 1977. Petitioner Alan Egerdahl executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is undated and purports to convey all of his current and future real and personal property holdings to the "A. D. Egerdahl Christian Order," which is designated as "an integrated auxiliary of Calvary Temple." Although petitioner Karen Egerdahl signed the latter document as petitioner Alan Egerdahl's spouse, she did not, under the terms of the agreement, make any similar gifts of her property or undertake a vow of poverty. Petitioner Alan Egerdahl filed a form entitled "Statutory Notice Pursuant to I.R. Code, Section 3402(n)" with his employer.
Petitioners Alan and Karen Egerdahl signed a pre-printed "Covenant" dated January 1, 1977.In a document also dated January 1, 1977, these same petitioners, acting as officers of the A. D. Egerdahl Religious Order, adopted pre-printed by-laws for their order. During the taxable years 1979 and 1980, the A. D. Egerdahl Christian Order requested monthly allowances and allotments in the amounts of $1,548 and $1,885, respectively.
During the taxable years 1979 and 1980, petitioners Alan Egerdahl and Karen Egerdahl contributed*176 $610.50 and $574 to the Calvary Temple.
On or about March 15, 1979, petitioner Alan Egerdahl filed a Form W-4, Employee's Withholding Allowance Certificate, with his employer on which he claimed 19 withholding allowances.
During the years in issue, petitioner Alan Egerdahl's personal residence was in his own name. Subsequent to petitioner Alan Egerdahl's execution of the document entitled "Irrevocable Gift and Vow of Poverty," he borrowed $1,500 from the Bank of Covington and executed a deed to secure this debt with respect to his personal residence. In connection with this credit extension, he did not disclose that he was allegedly living under a vow of poverty and owned no assets and had no personal income.
Petitioners Alan Egerdahl and Karen Egerdahl filed joint Federal income tax returns for the taxable years 1979 and 1980. On these returns, petitioners listed their occupations as members of a religious order. They did not report the receipt of any taxable wages during these years and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church.For the taxable year 1979, petitioners claimed the following itemized deductions on*177 their return:
Item Amount Medical & Dental premiums $150.00 State and local income taxes 209.52 Real estate taxes 316.81 General sales tax 237.00 Social Security tax 1,230.29 Interest on rectory 2,062.00 Calvary Temple 15,951.86 For the taxable year 1980, petitioners claimed the following itemized deductions on their return:
Item Amount Medical & Dental premium $150.00 State and local income taxes 123.82 Real estate taxes 280.58 General sales tax 250.00 Social Security tax 1,398.86 Interest on rectory 2,038.23 Second mortgage 155.17 Calvary Temple 18,457.36 Finally, for all of the taxable years in issue, petitioner Alan Egerdahl filed a claim for refund for FICA taxes withheld from his wages.
The Commissioner determined that petitioner Alan Egerdahl received taxable wages from his employer, Federal Express Corporation, in the amounts set forth above. The Commissioner also disallowed petitioners' claimed charitable contribution deductions for each of the taxable years in issue because it was not established that the amounts were, in fact, contributed to an organization within the purview of section 170. *178 The Commissioner also rejected petitioner Alan Egerdahl's claim that his wages were exempt from FICA taxes and disallowed petitioners' deductions for social security taxes. The Commissioner disallowed petitioners' remaining itemized deductions for the years in issue because they were less than the $3,400 zero bracket amount in effect for such taxable years. Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
Petitioner John Foshee During the years in issue, petitioner John Foshee was employed by Kraft Foods, Inc., as a laborer and received the following wages as remuneration for his services:
Year Amount 1976 $4,782.78 1977 10,030.63 Petitioner John Foshee was paid by his employer for such services with checks whose named payee was "John W. Foshee," and no other person had a right to cash these checks.
Petitioner John Foshee executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is dated January 1, 1977, and purports to convey all of his current and future real and personalproperty holdings to the "Foshee Christian Order," which is designated as "an integrated auxiliary*179 of the Calvary Temple." Although his wife, who is not a party to these proceedings, also signed this document as petitioner John Foshee's spouse, she did not, under the terms of the agreement, make any similar gifts of her property or undertake a vow of poverty.
Petitioner John Foshee and his wife, acting as an officer and a member, respectively, of the Foshee Christian Order, signed a pre-printed "Covenant" dated January 1, 1977. In a document also dated January 1, 1977, these same individuals, acting as officers of the Foshee Christian Order, adopted pre-printed by-laws for their order.
Petitioner John Foshee filed a Form 1040, U.S. Individual Federal Income Tax Return for the taxable year 1976 with various constitutional objections typed in the blanks requesting financial data. A large mass of "tax protestor" literature also accompanied this document. Petitioner John Foshee and his wife filed a joint Federal income tax return for the taxable year 1977. On this return, they listed their occupations as members of a religious order. For the taxable year 1977, petitioners did not report the receipt of any taxable wages and, instead, indicated that any remuneration received was*180 as the agent of Calvary Temple Church. For the taxable year 1977, petitioner John Foshee and his wife claimed a deduction for contributions to Calvary Temple Church in the amount of $11,630.63. Finally, for the taxable year 1977, petitioner John Foshee filed a claim for refund for FICA taxes withheld from his wages.
The Commissioner determined that petitioner John Foshee received taxable wages from his employer, Kraft Foods, Inc., in the amounts set forth above. The Commissioner also disallowed petitioner John Foshee's claimed charitable contribution deduction for the taxable year 1977 on the basis that it was not established that the sum was, in fact, contributed to an organization within the purview of section 170. The Commissioner also rejected petitioner John Foshee's claim that his wages were exempt from FICA taxes.Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
Petitioners Harold Johnston and Josephine Johnston During the years in issue, petitioner Harold Johnston was employed by Eastern Air Lines, Inc., as a mechanic and received the following wages as remuneration for his services:
Year Amount 1977 $22,183.66 1978 24,915.20 1979 27,806.42 *181 Petitioner Harold Johnston was paid by his employer for such services with checks whose named payee was "H. H. Johnston," and no other person had a right to cash these checks.
During the taxable years 1977, 1978 and 1979, petitioners Harold Johnston and Josephine Johnston maintained a joint account with the Eastern Airlines Employees Federal Credit Union and received the following amounts of taxable interest income:
Year Amount 1977 $584.45 1978 458.58 1979 565.15 Petitioner Harold Johnston executed a document entitled "Statement of Christian Faith and Application" which is dated September 20, 1977.Petitioner Harold Johnston also executed a pre-printed "Irrevocable Gift and Vow of Poverty," which is dated January 1, 1977, and purports to convey all of his current and future real and personal property holdings to the "Harold H. Johnston Religious Order," which is designated as "an integrated auxiliary of Calvary Temple." Although petitioner Josephine Johnston signed this latter document as petitioner Harold Johnston's spouse, she did not, under the terms of the agreement, make any similar gifts of her property or undertake a vow of poverty.
*182 In an undated document, petitioners Harold Johnston and Josephine Johnston, acting as officers of the Harold H. Johnston Religious Order, adopted pre-printed by-laws for their order. During the taxable years 1977, 1978 and 1979, the Harold H. Johnston Religious Order requested monthly allowances and allotments in the amounts of $1,779, $1,848.63 and $2,275.23, respectively.
During thetaxable years 1977, 1978 and 1979, these petitioners contributed $2,840.58, $3,377.50 and $2,933, respectively, to the Calvary Temple.
Petitioners Harold Johnston and Josephine Johnston filed joint Federal income tax returns for the taxable years 1977, 1978 and 1979. On these returns, they listed their occupations as members of a religious order. They did not report the receipt of any taxable wages during these years and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church. For each of these taxable years, petitioner Harold Johnston also filed a claim for refund of FICA taxes withheld from his wages. For the taxable years 1977, 1978 and 1979, petitioners claimed deductions on their returns for contributions to Calvary Temple Church in the amounts*183 of $102,058.66, $24,915.20 and $27,806.42, respectively.
The Commissioner determined that petitioner Harold Johnston received taxable wages from his employer, Eastern Air Lines, Inc., in the amounts set forth above. The Commissioner also disallowed petitioners' claimed charitable contribution deductions for each of the years in issue because it was not established that the amounts were, in fact, contributed to an organization within the purview of section 170. For the taxable year 1979, the Commissioner also determined that petitioners received an additional $193 and $565 of interest income from the Internal Revenue Service and the Eastern Airlines Credit Union, respectively. The Commissioner also determined that petitioners $790received of income from the Prudential Insurance Company which they failed to report on their 1979 Federal income tax return. For all of the years in issue, the Commissioner rejected petitioner Harold Johnston's claims that his wages were exempt from FICA taxes. Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
Petitioners Robert D. McCurry and Phyllis McCurry During the*184 years in issue, petitioner Robert D. McCurry was employed by Delta Air Lines, Inc., as a customer services agent and received the following wages as remuneration for his services:
Year Amount 1977 $17,658.76 1978 20,537.37 1980 24,725.40 Petitioner Robert D. McCurry was paid by his employer for such services with checks whose named payee was "Robert D. McCurry," and no other person had a right to cash these checks.
Petitioner Robert D. McCurry executed an undated "Statement of Christian Faith and Application." He also executed a preprinted "Irrevocable Gift and Vow of Poverty" which is dated February 18, 1982, and bears a notation that a similar instrument was signed on January 1977, but was subsequently lost and that this replacement document is retroactiveto that date. This document purports to convey all of his present and future real and personal property holdings to the "Robert D. McCurry, Sr. Christian Order," which is designated as "an integrated auxiliary of Calvary Temple." Although petitioner Phyllis E. McCurry signed this latter document as petitioner Robert D. McCurry's spouse, she did not, under the terms of the agreement, make any*185 similar gifts of her property or undertake a vow of poverty. Petitioner Robert D. McCurry filed a form entitled "Statutory Notice Pursuant to I.R. Code, Section 3402(n)" with his employer.
Petitioners Robert D. McCurry and Phyllis E. McCurry, acting as officers of the Robert D. McCurry Sr. Christian Order, signed a pre-printed "Covenant" which is dated January 1, 1977. In a document also dated January 1, 1977, these same petitioners, again acting in the same official capacity, adopted pre-printed by-laws for their order. During the taxable years 1977 and 1978, the Robert D. McCurry Sr. Christian Order requested monthly allowances and allotments in the amounts of $1,744 and $1,944, respectively.
During the taxable years in issue, petitioners Robert D. McCurry and Phyllis E. McCurry made no contributions to the Calvary Temple.
On or about November 21, 1977, petitioner Robert D. McCurry purchased a 1976 Ford automobile and took title in the name of "Robert D. McCurry, Sr."
On or about November 3, 1981, March 8, 1982, July 13, 1982, and January 17, 1983, petitioner Robert D. McCurry submitted credit applications to the Delta Employees' Credit Union. On such applications, *186 he stated that he owned his personal residence and a 1976 Ford automobile. He made no mention of his vow of poverty or other religious undertakings.
On or about April 22, 1977, petitioner Robert D. McCurry filed a Form W-4, Employee's Withholding Allowance Certificate, with his employer, Delta Air Lines, Inc., in which he claimed four withholding allowances. He filed additional Forms W-4 with his employer as follows:
Number of Date Exemptions Claimed July 19, 1977 23 April 24, 1978 24 October 17, 1980 24 Petitioners Robert D. McCurry and Phyllis E. McCurry filed joint Federal income tax returns for the taxable years 1977, 1978 and 1980. On these returns, petitioners listed their occupations as members of a religious order. They did not report the receipt of any taxable wages during the years in issue and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church. For the taxable years 1977, 1978 and 1980, petitioners claimed charitable contribution deductions to Calvary Temple in the amounts of $33,795.76, $20,537.37 and $24,725.40, respectively. Finally, petitioner Robert D. McCurry filed a claim for refund*187 for each of the taxable years in issue for FICA taxes withheld from his wages.
The Commissioner determined that petitioner Robert D. McCurry received taxable wages from his employer, Delta Air Lines, Inc., in the amounts set forth above. The Commissioner also disallowed petitioners' claimed charitable contribution deductions on the basis that it had not been established that petitioners had, in fact, made the contributions to an organization within the purview of section 170. The Commissioner also rejected petitioner Robert D. McCurry's claim that his wages were exempt from FICA taxes.Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
Petitioner Larry McEver During the taxable year 1977, petitioner Larry McEver was employed by Gerald M. Leigh, Engineer, and received $15,529.60 of wages as remuneration for his services. Petitioner Larry McEver was paid by his employer for such services with checks whose named payee was "Larry F. McEver," and no other person had a right to cash these checks.
Petitioner Larry McEver executed a pre-printed "Statement of Christian Faith and Application" which is dated January 1, *188 1977. He also executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is also dated January 1, 1977, and purports to convey all of his current and future real and personal property to the "Larry F. McEver Order," which is designated as "an integrated auxiliary of Calvary Temple."
Petitioner Larry McEver signed a pre-printed "Covenant" which is dated January 1, 1977. In a document dated January 1, 1977, petitioner Larry McEver, acting as an officer of the "Larry F. McEver Order," adopted pre-printed by-laws for his order. During the taxable year 1977, the Larry F. McEver Order requested a monthly allowance and allotment in the amount of $1,300.
During the taxable year 1977, petitioner Larry McEver contributed $2,870 to the Calvary Temple.
Petitioner Larry McEver filed an individual Federal income tax return for the taxable year 1977. On this return, he listed his occupation as a member of a religious order.He did not report the receipt of any taxable wages this year and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church. For the taxable year 1977, petitioner claimed a charitable contribution deduction to Calvary*189 Temple in the amount of $21,594.58.Finally, petitioner Larry McEver filed a claim for refund for the taxable year 1977 for FICA taxes withheld from his wages.
The Commissioner determined that petitioner Larry McEver received taxable wages from his employer, Gerald M. Leigh, Engineer, in the amount set forth above. The Commissioner also disallowed petitioner's claimed charitable contribution deduction on the basis that it had not been established that petitioner had, in fact, made the contribution to an organization within the purview of section 170. Finally, the Commissioner rejected petitioner's claim that his wages were exempt from FICA taxes.
Petitioners Robert May and Jeanne May During the years in issue, petitioner Robert May was employed by A C Delco Division, General Motors, as a parts man and received the following wages as remuneration for his services:
Year Amount 1977 $15,311.15 1978 14,079.49 1979 16,406.82 Petitioner Robert May was paid by his employer for such services with checks whose named payee was "Robert D. May," and no other person had a right to cash these checks.
Petitioner Robert May executed a pre-printed "Statement*190 of Christian Faith and Application" which is dated August 11, 1977. He also executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is dated February 1, 1977, and purports to convey all of his current and future real and personal property to the "Robert D. May Christian Order," which is designated as "an integrated auxiliary of Calvary Temple." Although petitioner Jeanne May also signed this latter document as petitioner Robert D. May's wife, she did not, under the terms of the agreement, make any similar gifts of property or undertake a vow of poverty.
Petitioner Robert May signed a pre-printed "Covenant" which is dated February 7, 1977. During the taxable years 1977, 1978 and 1979, petitioners Robert May and Jeanne May contributed $2,128.75, $620.95 and $1,097.60, respectively, to the Calvary Temple and its affiliates.
On or about July 27, 1977 and September 8, 1977, petitioners Robert May and Jeanne May purchased a 1974 Lincoln Continental and a 1972 International Travelall automobile, respectively, and titles to said vehicles were issued in the name of "Robert D. May."
On or about July 27, 1977, September 9, 1977, July 24, 1978, October 1, 1979, and*191 November 20, 1979, petitioner Robert May submitted credit applications to Circle 10 Federal Credit Union. On such applications, he stated that he owned various automobiles and also listed his employment with A C Delco as a source of personal income. He made no mention of his vow of poverty or other religious undertakings.
On or about July 20, 1979, petitioner Robert May transferred real property known as 2510 Springdale Road, Atlanta, Georgia, by warranty deed to Aaron B. Williams and Norma J. Williams. The total sales price was $40,000.
Petitioners Robert May and Jeanne May filed a joint Federal income tax return for the taxable year 1977. On this return, petitioners listed their occupations as members of a religious order. They did not report the receipt of any taxable wages during this year and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church.For the taxable year 1977, petitioners claimed a charitable contribution deduction to Calvary Temple in the amount of $39,111.15. Finally, petitioner Robert May filed a claim for refund for the taxable year 1977 for FICA taxes withheld from his wages. Petitioner Robert May did*192 not file Federal income tax returns for the taxable years 1978 and 1979.
The Commissioner determined that petitioner Robert May received taxable wages from his employer, A C Delco Division, General Motors, in the amounts set forth above for each of the years in issue. The Commissioner also disallowed petitioners' claimed charitable contribution deduction on their 1977 joint Federal income tax return on the basis that it had not been established that petitioners had, in fact, made the contribution to an organization within the purview of section 170.For the taxable year 1979, the Commissioner determined that petitioner Robert May realized $40,000 of long-term capital gain. The Commissioner also determined that the imposition of the additions to tax set forth above was warranted.
Petitioners Erie Pollard and Lee Pollard During the years in issue, petitioner Eric Pollard was employed by Federal Express Corporation as a courier or ramp agent and received the following wages as remuneration for his services:
Year Amount 1976 $16.000.92 1979 19,507.33 1980 25,031.85 Petitioner Eric Pollard was paid by his employer for such services with checks*193 whose named payee was "Eric Pollard," and no other person had a right to cash these checks.
Petitioners Eric Pollard and Lee Pollard each executed a pre-printed "Statement of Christian Faith and Application." Petitioner Eric Pollard also executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is dated January 1, 1977, and purports to convey all of his current and future real and personal property to the "Pollard Christian Religious Order of Saints," which is designated as "an integrated auxiliary of Calvary Temple." Although petitioner Lee Pollard signed this latter document as petitioner Eric Pollard's spouse, she did not, under the terms of the agreement, make any similar gifts of her property or undertake a vow of poverty. Petitioner Eric Pollard filed a form entitled "Statutory Notice Pursuant to I.R. Code, Section 3402(n)" with his employer.
Petitioners Eric Pollard and Lee Pollard signed a preprinted "Covenant" which is dated January 1, 1977. In a document also dated January 1, 1977, petitioners Eric Pollard and Lee Pollard, acting as officers of the "Pollard Christian Religious Order of Saints," adopted pre-printed by-laws for their order.
On or*194 about February 24, 1978, petitioner Eric Pollard purchased a home for use as a personal residence which is located at 2262 Perkerson Road, Atlanta, Georgia, and title to said real property was held during the relevant years in issue in the name of Eric A. Pollard. On or about March 23, 1980, petitioner Eric Pollard purchased a 1978 Ford automobile and title was issued in the name of "Eric A. Pollard."
On or about May 4, 1979, petitioner Eric Pollard filed with his employer, Federal Express Corporation, a Form W-4, Employee's Withholding Allowance Certificate, on which he claimed 19 withholding allowances.
For the taxable year 1976, petitioner Eric Pollard filed a Form 1040, U.S. Individual Income Tax return, which contained various constitutional objections typed in the blanks requesting financial data. A large mass of "tax protestor" literature also accompanied this document.
Petitioners Eric Pollard and Lee Pollard filed joint Federal income tax returns for the taxable years 1979 and 1980. On these returns, petitioners listed their occupations as members of a religious order. They did not report the receipt of any taxable wages during these years, and instead, *195 indicated that any remuneration received was as the agent of Calvary Temple Church. For the taxable year 1979, petitioners claimed the following itemized deductions on their return:
Item Amount Medical & Dental premiums $150.00 State and local income taxes 284.04 Real estate taxes 428.97 General sales taxes 196.00 Social Security taxes 1,171.80 Interest on rectory 1,707.19 For the taxable year 1980, petitioners claimed the following itemized deductions on their return:
Item Amount Medical & Dental premiums $150.00 State and local income taxes 714.48 Real estate taxes 372.47 General sales taxes 230.00 Social Security taxes 1,513.35 Interest on rectory 1,973.16 Finally, petitioner Eric Pollard filed a claim for refund for the taxable years 1979 and 1980 for FICA taxes withheld from his wages.
The Commissioner determined that petitioner Eric Pollard received taxable wages from his employer, Federal Express Corporation, in the amounts set forth above. The Commissioner also disallowed petitioners' claimed charitable contribution deductions for the taxable years 1979 and 1980 on the basis that it had not been established that*196 petitioners had, in fact, made the contributions to an organization within the purview of section 170.The Commissioner also disallowed petitioners' 1979 and 1980 social security tax deductions and adjusted their remaining itemized deductions to conform with the zero bracket amounts in effect for those years. Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
Petitioners Roger Schroeder and Nancy Schroeder During the years in issue, petitioner Roger Schroeder was employed by Ford Motor Company as a process engineer and received the following wages as remuneration for his services:
Year Amount 1978 $29,695.75 1979 27,745.58 1980 32,579.24 Petitioner Roger Schroeder was paid by his employer for such services with checks whose named payee was "R. D. Schroeder," and no other person had a right to cash these checks.
Petitioner Roger Schroeder executed a pre-printed "Statement of Christian Faith and Application" which is dated November 23, 1977. He also executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is dated January 4, 1977, and purports to convey all of his current*197 and future real and personal property to the "Roger Schroeder Christian Order," which is designated as "an integrated auxiliary of Calvary Temple."Although petitioner Nancy Schroeder also signed this latter document as petitioner Roger Schroeder's spouse, she did not, under the terms of the agreement, make any similar gifts of her property or undertake a vow of poverty. Petitioner Roger Schroeder filed a form entitled "Statutory Notice Pursuant to I.R. Code, Section 3402(n)" with his employer.
Petitioner Roger Schroeder signed a pre-printed "Covenant" which is dated December 1, 1977. In a document dated November 23, 1977, petitioners Roger Schroeder and Nancy Schroeder, acting as officers of the "Roger Schroeder Christian Order," adopted pre-printed by-laws for their order. During the taxable years 1978, 1979 and 1980, the Roger Schroeder Christian Order requested monthly allowances and allotments in the amounts of $2,161.36, $2,312 and $2,600, respectively.
During the taxable years 1978, 1979 and 1980, petitioners Roger Schroeder and Nancy Schroeder contributed $6,347.66, $3,476.75 and $4,782.25, respectively, to the Calvary Temple.
Petitioners Roger Schroeder and*198 Nancy Schroeder filed joint Federal income tax returns for the taxable years 1978, 1979 and 1980. On these returns, petitioners listed their occupations as members of a religious order. They did not report the receipt of any taxable wages during these years and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church. For the taxable years 1978, 1979 and 1980, petitioners claimed charitable contribution deductions to Calvary Temple in the amounts of $30,828.12, $27,745.58, and $32,579.24, respectively. Finally, petitioner Roger Schroeder filed a claim for refund for each of the taxable years in issue for FICA taxes withheld from his wages.
The Commissioner determined that petitioner Roger Schroeder received taxable wages from his employer, Ford Motor Company, in the amounts set forth above. The Commissioner also disallowed petitioners' claimed charitable contribution deductions on the basis that it had not been established that petitioners had, in fact, made the contributions to an organization within the purview of section 170. The Commissioner also rejected petitioner Roger Schroeder's claim that his wages were exempt from FICA*199 taxes. Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
Petitioner Kenneth Smith During the taxable year 1976, petitioner Kenneth Smith was employed as a subcontractor. He failed to cooperate with agents of the Internal Revenue Service in revealing the nature of his business dealings nor was he any more enlightening in responding to interrogatories propounded by respondent in these proceedings.
Petitioner Kenneth Smith executed a pre-printed "Statement of Christian Faith and Application" which is dated January 1, 1977. He also executeda pre-printed "Irrevocable Gift and Vow of Poverty" which is also dated January 10, 1977, and purports to convey all of his current and future real and personal property to the "Kenneth R. Smith Christian Order," which is designated as "an integrated auxiliary of Calvary Temple." Although his wife signed this latter document as petitioner Kenneth Smith's spouse, she did not, under the terms of the agreement, make any similar gifts of her property or undertake a vow of poverty.
Petitioner Kenneth Smith signed a pre-printed "Covenant" which is dated January 1, 1977. *200 In a document dated January 1, 1977, petitioner Kenneth Smith and his wife, acting as officers of the "Kenneth R. Smith Christian Order," adopted pre-printed by-laws for their order.
Petitioner Kenneth Smith filed a Form 1040, U.S. Individual Income Tax Return, for the taxable year 1976. Instead of completing the form in accordance with Internal Revenue Service rules and regulations, petitioner Kenneth Smith typed in various constitutional objections in the blanks requesting financial data.A large mass of "tax protestor" literature also accompanied the form he submitted. The Internal Revenue Service informed petitioner in a letter dated May 23, 1977, that the form he submitted for the taxable year 1976 was not an acceptable tax return, yet he declined to submit a proper Federal income tax return for that year.
Utilizing cost-of-living statistics published by the Bureau of Labor Statistics, the Commissioner determined that petitioner received $9,222 of taxable income during 1976. The Commissioner also determined that the imposition of the additions to tax set forth above was warranted.
Petitioner David Sutton During the years in issue, petitioner David Sutton*201 was employed by Delta Air Lines, Inc., as a customer services agent and received the following wages as remuneration for his services:
Year Amount 1977 $18,284.80 1978 20,491.58 1979 23,184.52 Petitioner David Sutton was paid by his employer for such services with checks whose named payee was "David D. Sutton," and no other person had a right to cash these checks.
Petitioner David Sutton executed a pre-printed "Statement of Christian Faith and Application" which is dated January 1, 1977. He also executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is dated February 19, 1982, but bears a notation that the original had been lost and that the replacement was retroactive to January 1977. This document purports to convey all ofhis current and future real and personal property to the "Sutton Christian Order," which is designated as "an integrated auxiliary of Calvary Temple." Petitioner also filed a form entitled "Statutory Notice Pursuant to I.R. Code, Section 3402(n)" with his employer.
Petitioner David Sutton signed a pre-printed "Covenant" which is dated January 1, 1977. In a document dated February 19, 1982, which also indicates*202 that it replaces a lost original and is retroactive to January 1977, petitioner, acting as an officer of the "Sutton Christian Order," adopted pre-printed by-laws for his order. During the taxable year 1977, the Sutton Christian Order requested a monthly allowance and allotment in the amount of $1,645.
During the taxable years in issue, petitioner filed several Forms W-4, Employee's Withholding Allowance Certificates, with his employer claiming the following withholding allowances:
Number of Date Allowances February 15, 1977 20 July 1, 1977 26 June 30, 1978 35 During the years in issue, petitioner owned, in his own name, a 1972 Plymouth automobile and a 1974 Suzuki motorcycle.
Petitioner filed individual Federal income tax returns for the taxable years 1977, 1978 and 1979. On these returns, petitioner listed his occupation as a member of a religious order. He did not report the receipt of any taxable wages during the years in issue and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church. For the taxable years 1977, 1978 and 1979, petitioner claimed charitable contribution deductions to Calvary Temple*203 in the amounts of $18,284.80, $20,491.58 and $23,184.52, respectively. Finally, petitioner filed a claim for refund for each of the taxable years in issue for FICA taxes withheld from his wages.
The Commissioner determined that petitioner David Sutton received taxable wages from his employer, Delta Air Lines, Inc., in the amounts set forth above.The Commissioner also disallowed petitioner's claimed charitable contribution deductions on the basis that it had not been established that petitioner had, in fact, made the contributions to an organization within the purview of section 170. The Commissioner also rejected petitioner's claim that his wages were exempt from FICA taxes. Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
Petitioners Philip Thomason and Anita Thomason During the years in issue, petitioner Philip Thomason was employed by Atlanta Gas Light Company as a commercial representative and received the following wages as remuneration for his services:
Year Amount 1978 $16,446.63 1979 17,895.28 1980 19,654.48 Petitioner Philip Thomason was paid by his employer for*204 such services with checks whose named payee was "P. D. Thomason," and no other person had a right to cash these checks. During 1979, petitioner Philip Thomason also received $119 of wages from Pinkertons, Inc.
Petitioner Philip Thomason executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is dated April 9, 1978, and purports to convey all of his current and future real and personal property to the "P. D. Thomason Christian Religious Order," which is designated as "an integrated auxiliary of Calvary Temple." Petitioner Anita Thomason signed this latter document as petitioner Philip Thomason's spouse, although she did not, under the terms of the agreement, make any similar contributions of her property or undertake a vow of poverty.
Petitioners Philip Thomason and Anita Thomason signed a preprinted "Covenant" which is dated April 9, 1978. In a document also dated April 9, 1978, petitioners Philip Thomason and Anita Thomason, acting, as officers of the "P. D. Thomason Christian Religious Order," adopted pre-printed by-laws for their order.
During the taxable years 1978, 1979 and 1980, petitioners Philip Thomason and Anita Thomason contributed $1,691, $1,753 and $2,341, *205 respectively, to the Calvary Temple.
During the years in issue, title to petitioner Philip Thomason's personal residence was in the name of "Philip D. Thomason."
On or about April 6, 1978, petitioner Philip Thomason filed with his employer, Atlanta Gas Light Company, a Form W-4, Employee's Withholding Allowance Certificate, on which he claimed 19 withholding allowances.
Petitioner Philip Thomason filed an individual Federal income tax return for the taxable year 1978. Petitioners Philip Thomason and Anita Thomason filed joint Federal income tax returns for the taxable years 1979 and 1980. On these returns, petitioners listed their occupations as members of a religious order. On his 1978 individual income tax return, petitioner Philip Thomason reported taxable wages of $5,013. Petitioners Philip Thomason and Anita Thomason did not report the receipt of any taxable wages during the taxable years 1979 and 1980 and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church. For the taxable years 1978, 1979 and 1980, petitioners claimed charitable contribution deductions to Calvary Temple in the amounts of $30,203, $14,170 and $17,653, *206 respectively. For the taxable year 1979, petitioners also claimed the following itemized deductions:
Item Amount Medical & Dental expenses $501 State & local income taxes 466 Real estate taxes 291 General sales taxes 261 Personal property tax 291 Social Security tax 1,104 Interest on rectory 1,124 Finally, petitioner Philip Thomason filed aclaim for refund for each of the taxable years in issue for FICA taxes withheld from his wages.
The Commissioner determined that petitioner Philip Thomason received taxable wages from his employers, Atlanta Gas Light Company and Pinkertons, Inc., in the amounts set forth above. The Commissioner also disallowed petitioners' claimed charitable contribution deductions on the basis that it had not been established that petitioners had, in fact, made the contributions to an organization within the purview of section 170. The Commissioner also rejected petitioner Philip Thomason's claim that his wages were exempt from FICA taxes. For the taxable year 1979, the Commissioner disallowed petitioners' deduction for social security taxes and disallowed the remaining itemized deductions because they totaled less*207 than the zero bracket amount. Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
Petitioner James Thompson During the years in issue, petitioner James Thompson was employed by Great A & P Tea Company, Inc., Georgia Lift Company, Inc., Toddlers Kollege, Inc., and Colonical Stores, Inc., and received the following wages as remuneration for his services:
Year Amount 1976 $11,673.54 1978 14,807.02 1979 17,757.12 1980 18,929.84 Petitioner was paid by his employers for such services with checks whose named payee was "James F. Thompson," and no other person had a right to cash these checks.
Petitioner executed a pre-printed "Statement of Christian Faith and Application" which is dated January 1, 1977. He also executed a pre-printed "Irrevocable Gift and Vow of Poverty" which is undated and purports to convey all of his current and future real and personal property to the "James F. Thompson Christian Order," which is designated as "an integrated auxiliary ofCalvary Temple."
Petitioner signed a pre-printed "Covenant" which is dated January 1, 1977. In a document also dated January 1, 1977, petiioner, *208 acting as an officer of the "James F. Thompson Christian Order," adopted pre-printed by-laws for his order. During the taxable year 1980, petitioner contributed $132.50 to the Calvary Temple.
On or about February 1, 1980, petitioner purchased a 1977 Buick automobile taking title in the name of "James F. Thompson." During the years in issue, petitioner submitted numerous credit applications to the Colonial Stores Employees' Credit Union. On such applications, petitioner did not disclose his vow of poverty and indicated that he owned real and personal property.
Petitionerfiled individual Federal income tax returns for the taxable years 1976, 1978, 1979 and 1980. For the taxable year 1976, petitioner filed a Form 1040, U.S. Individual Income Tax Return, with various constitutional objections typed in the blanks requesting financial data. For the taxable years 1978, 1979 and 1980, petitioner listed his occupation as a member of a religious order. He did not report the receipt of any taxable wages during the taxable years 1978, 1979 and 1980 and, instead, indicated that any remuneration received was as the agent of Calvary Temple Church. For the taxable year 1978, petitioner*209 claimed a charitable contribution deduction to Calvary Temple in the amount of $14,807.02. Finally, petitioner filed a claim for refund for the taxable years 1978 and 1979 for FICA taxes withheld from his wages.
The Commissioner determined that petitioner received taxable wages from his employers in the amounts set forth above. The Commissioner determined that petitioner was liable for self-employment tax for the taxable year 1976 in the amount of $261.The Commissioner also disallowed petitioner's claimed charitable contribution deduction on the basis that it had not been established that petitioner had, in fact, made the contribution to an organization within the purview, of section 170. The Commissioner also rejected petitioner's claim that his wages were exempt from FICA taxes. Finally, the Commissioner determined that the imposition of the additions to tax set forth above was warranted.
OPINION
Issue 1. Receipt of Taxable Income The first issue for decision is whether petitioners Eric Pollard, Kenneth Smith, John Foshee, Phillip Brooks, David Sutton, Larry McEver, Harold Johnston, James Thompson, Robert Dollar, Robert D. McCurry, Robert May, Roger*210 Schroeder, Philip Thomason, Alan Egerdahl, Michael Barton and Robert E. McCurry received taxable income during the years in issue. For discussion purposes, we will address these petitioners' similar issues as a whole and separately discuss any additional taxable income issues which are peculiar to the indicated petitioners.
General Petitioners contend that they did not receive taxable income as determined by the Commissioner. They argue that any remuneration received for their services performed for third parties was as the agent of their respective "religious orders," which are "integrated auxiliaries" of Calvary Temple Church. Petitioners rely heavily upon
Office Decision 119 ,1 C.B. 82 (1919) , which provides as follows:A clergyman is not liable for any income tax on the amount received by him during the year from the parish of which he is in charge, provided that he turns over to the religious order of which he is a member, all the money received in excess of his actual living expenses, on account of the vow of poverty which he has taken.
Members of religious orders are subject to tax upon taxable income, if any, received by them individually, *211 but are not subject to tax on income received by them merely as agents of the orders of which they are members.
Respondent contends that these petitioners received taxable income in their individual*212 capacity and not as agents of "religious orders" living under a vow of poverty. He claims that these petitioners' "religious orders" had no separate existence from them as individuals. The only funds received by these "religious orders" were compensation from third parties for services performed by these individual petitioners, and these funds were generally used by these petitioners for their personal living expenses. Further, these "religious orders" maintained no books and records. There also were no written agreements between Calvary Temple and these petitioners requiring the diversion of their salaries to the church. Finally, payment for these petitioners' services was transmitted to them in the form of checks payable in their own names; no one other than these petitioners had a right to cash these checks. Based upon these facts, respondent argues that petitioners were not agents of Calvary Temple for Federal income tax purposes.
In
McGahen v. Commissioner, 76 T.C. 468">76 T.C. 468720 F.2d 664">720 F.2d 664 (3d Cir. 1983), we examined a similar factual setting and claim that a taxpayer received his salary as an agent*213 of a "religious order." There, the taxpayer formed his own "auxiliary church" (Chapter 7807) to the Basic Bible Church of America; he executed a vow of poverty whereby he purportedly transferred all of his assets, including wages, to Chapter 7807; he was instructed by an official of the Basic Bible Church of America to continue his work as a boilermaker; he deposited all of his wages into a checking account in the name of Chapter 7807; and he and his wife used these funds to pay their personal, living and family expenses. We rejected the taxpayer's claim that he merely received his wages as an agent of church and stated that:When an agent receives income for a principal, it is the income of the principal, not the agent.
Maryland Casualty Co. v. United States, 251 U.S. 342">251 U.S. 342Lucas v. Earl, 281 U.S. 111">281 U.S. 111Helvering v. Horst, 311 U.S. 112">311 U.S. 112Helvering v. Eubank, 311 U.S. 122">311 U.S. 122Helvering v. Clifford, 309 U.S. 331">309 U.S. 33176 T.C. at 478-479 .]As to the amount of taxable income received by these petitioners as remuneration for services performed for third parties, all of these petitioners, with the exception of petitioner Kenneth Smith, have stipulated*217 to their respective amounts of taxable income. As these stipulated amounts do not vary from the Commissioner's determinations, the Commissioner's determinations of the amount of taxable income received by these petitioners as remuneration for services performed for third parties for the years in issue (with the exception of Kenneth Smith), are sustained.
Kenneth Smith With respect to petitioner Kenneth Smith, due to his self-employment as a subcontractor, refusal to stipulate as to the amount of taxable income received during the taxable year 1976 and refusal to produce records concerning his income-earning activities for this year, the Commissioner determined his taxable income utilizing Bureau of Labor Statistics. This petitioner presented no evidence or argument on brief contesting the propriety of the method of the Commissioner's determination of his taxable income for the year in issue. Even if he had, section 446 confers upon the Secretary broad authority to compute a taxpayer's income in such circumstances, and we have expressly approved the use of Bureau of Labor Statistics.
Giddio v. Commissioner, 54 T.C. 1530">54 T.C. 1530Robert May The Commissioner also determined that petitioner Robert May realized $40,000 of long-term capital gain resulting from the sale of real property during the taxable year 1979. Respondent asserts that, because the sales price of this real property was $40,000 and petitioner offered no definitive proof of his basis in said capital asset, the entire amount of gain must be recognized. Petitioner contends that his oral testimony that his basis in this parcel was $34,500 refutes the Commissioner's determination. Petitioner offered no other proof on this issue.
After observing the demeanor of this witness during his testimony, we do not accept his oral declaration that his basis in this parcel was $34,500. *219
Harold Johnston and Josephine Johnston The Commissioner determined that these petitioners received $758 of interest income from the Internal Revenue Service and Eastern Air Lines during the taxable year 1979 which they failed to include on their return for that year. The Commissioner also determined that they received $790 of income from an insurance company which they failed to include on their 1979 return. Neither party addressed these issues in their briefs. The parties stipulated that these petitioners received interest income from Eastern Air Lines Employees Federal Credit Union during the taxable years 1977, 1978 and 1979 in the amounts of $584.45, $458.58 and $565.15, respectively, yet respondent did not seek to increase the deficiencies for the taxable years 1977 and 1978 nor seek to amend the pleadings to conform to the proof. Neither party introduced any other evidence concerning this issue.
The Commissioner's determinations are presumptively correct,
Welch v. Helvering, 290 U.S. 111">290 U.S. 111Michael Barton The Commissioner determined that petitioner Michael Barton realized taxable income of $11,122 for each of taxable years 1976 and 1977, an amount computed utilizing Bureau of Labor Statistics. Petitioner contends that because he worked only for Calvary Temple Church as a minister during these years, *221 he had no taxable income. Respondent contends petitioner introduced no evidence to refute the Commissioner's determinations.
The Commissioner's determinations are presumptively correct,
Welch v. Helvering, supra , and petitioner has the burden of proving them to be erroneous. Rule 142(a). The record does not support petitioner's claim that he served as a minister during the years in issue. Although petitioner may hold strong religious beliefs, the record reveals that his primary duties associated with Calvary Temple were the operation of its printing machines and the printing of the forms associated with the formation of the various "religious orders." Accordingly, we hold that petitioner has failed to carry his burden of proof, and we sustain the Commissioner's determination that Michael Barton received taxable income during the years in issue. Rule 142(a).Robert E. McCurry and Evelyn E. McCurry The final determination of taxable income concern petitioners Robert E. McCurry and Evelyn E. McCurry, his wife.For the taxable year 1976, the Commissioner determined that petitioner Robert E. McCurry had taxable income in the amount of $14,830. *222 For the taxable year 1977, the Commissioner determined that petitioners Robert E. McCurry and Evelyn E. McCurry realized taxable income of $15,483 each. These determinations are based upon Bureau of Labor Statistics, and the resulting income tax liabilities were computed as though each petitioner had filed a separate return for the years in issue.
Respondent now concedes in his briefs that these determinations are erroneous and seeks only to include in petitioners' income the $125 and $100 weekly allowances provided petitioners Robert E. McCurry and Evelyn E. McCurry, respectively. In support of this argument, he contends section 61(a) requires the inclusion in income of "all income from whatever source derived" unless a specific statutory exclusion is present. Petitioners contend that they had no taxable income during the years in issue pursuant to section 107.
We agree with respondent that section 61(a) requires that these weekly allowances be included in petitioners' incomes unless they establish that these sums should be excluded under another provision of the Internal Revenue Code. Section 107 provides:
SEC. 107. RENTAL VALUE OF PARSONAGES.
In the case*223 of a minister of the gospel, gross income does not include--
(1) the rental value of a home furnished to him as part of his compensation; or
(2) the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home.
Respondent conceded during trial that petitioner Robert E. McCurry was a minister of the gospel. During the years in issue, both petitioners devoted all of their time and effort to Calvary Temple which, in turn, directly paid the expenses for their residence, furnishings, utilities, food, automobile, entertainment and medical and life insurance. Petitioners Robert E. McCurry and Evelyn E. McCurry also received $125 and $100 per week, respectively, during the years in issue for "expenses." Neither individual maintained any records of how these weekly allotments were spent.
The Commissioner's determinations are presumptively correct,
Welch v. Helvering, supra , and petitioners have the burden of proving them to be erroneous. Rule 142(a). Petitioners have not substantiated that any of their weekly allowances were used "to rent or provide a home." In fact, the record reveals that Calvary*224 Temple directly paid for such expenses. Moreover, the regulations require that prior to payment of a rental allowance, the employing church must designate the rental allowance in an employment contract or other appropriate instrument so as to clearly identify the portion of the minister's salary that is the rental allowance.Sec. 1.107-1(b), Income Tax Regs. As petitioners had no written agreement with the church concerning this matter, they have failed to comply with the regulations.Accordingly, for the years in issue, we hold that the weekly allowances received by petitioners must be included in their gross incomes. Section 61(a).Issue 2. Charitable Contribution Deductions The next issue for decision is whether any of the petitioners is entitled to a charitable contribution deduction under section 170(c) for their contributions to Calvary Temple Church for any of the years in issue.
Petitioners generally contend that because they made "irrevocable gifts" of their current and future real and personal property to their respective "religious orders," which are designated as "integrated auxiliaries of Calvary Temple," they should be allowed their claimed*225 charitable contribution deductions. Further, in determining whether the requirements of this section are satisfied, they argue that any examination of the church's religious tenets is inappropriate provided these tenets were adopted in good faith. Finally, they argue generally that respondent's disallowance of their claimed charitable contribution deductions is part of a concerted effort to harass and discriminate against non-traditional churches. In support thereof, they contend that respondent utilizes more lenient standards when examining claimed charitable contribution deductions to established churches, such as those associated with the Catholic religion, as opposed to claimed charitable contribution deductions to non-traditional churches such as Calvary Temple. They also assert that respondent further discriminates against non-traditional churches by denying charitable contribution deductions for contributions to Calvary Temple because its officials and members comment on various church-state issues, yet respondent fails to deny similar deductions for contributions to Catholic churches when church officials have publicly sought to ban abortions and nuclear weaponry.
*226 Respondent initially contends that petitioners have failed to substantiate all of their claimed charitable contribution deductions stemming from the establishment of petitioners' respective "religious orders" and the execution of the aforesaid "Irrevocable Gifts and Vow of Poverty" forms with respect to their current and future real and personal property. He further contends that, even if petitioners have made substantiated contributions to Calvary Church, petitioners have still failed to prove that these sums were received and retained by Calvary Temple or that Calvary Temple treated these amounts as charitable contributions. Finally, respondent asserts that petitioners have failed to prove that Calvary Temple qualified as a charitable donee within the purview of section 170(c) as: (1) Calvary Temple was not operated exclusively for an exempt purpose; (2) a part of the net earnings of Calvary Temple inured to the benefit of private individuals; and (3) a substantial part of the activities of Calvary Temple constituted attempts to influence legislation.
We initially observe that petitioners have generally claimed charitable contribution deductions on their returns for*227 the years in issue (at least those petitioners who actually filed valid returns for such years) in amounts equal to or in excess of their entire incomes for such taxable years. Section 170(b)(1)(A)(i) limits the charitable contribution deduction available to an individual to 50 percent of the individual's contribution base which section 170(b)(1)(E) [now section 170(b)(1)(F)] defines to be the adjusted gross income without regard to any net operating loss carryback. Therefore, our discussion herein will relate only to the amount qualifying for the deduction and not any sums equal to or in excess of petitioners' respective salaries for that taxable year. The relevant part of section 170 provides:
SEC. 170. CHARITABLE, ETC., CONTRIBUTIONS AND GIFTS.
(c) Charitable Contribution Defined.--For purposes of this section, the term "charitable contribution" means a contribution or gift to or for the use of--
* * *
(2) A corporation, trust, or community chest, fund, or foundation--
(A) created or organized in the United States or in any possession thereof, or under the law of the United States, any State, the District of Columbia, or any possession of the United States;
(B) *228 organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals;
(C) no part of the net earnings of which inures to the benefit of any private shareholder or individual; and
(D) which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office.
In order for a taxpayer to have made a charitable contribution within purview of section 170(c), he must have surrendered dominion and control over the item in question and this determination must be based upon all of the facts of a particular case.
DeWitt v. United States, 204 Ct. Cl. 274">204 Ct. Cl. 274In the instant case, petitioners have failed to satisfactorily demonstrate that they relinquished dominion and control over*229 their present and future real and personal property when they executed the aforesaid "Irrevocable Gift and Vow of Poverty" forms concerning their respective "religious orders." Petitioners continued to use the real and personal property they allegedly assigned to their respective "religious orders" in the same manner after the execution of these forms as they had prior to the execution of these forms. Further, in many instances, title to various automobiles andparcels of real property did not change after the alleged contributions were made.
DeWitt v. United States, supra. We have, however, found*230 that various petitioners did, in fact, make contributions of specific sums of money to Calvary Temple Church during some of the years in issue. We must then decide whether any of these sums qualifies as a charitable contribution deduction within the purview of section 170(c). Petitioners bear the burden of proving that the recipient qualified under section 170(c)(2).
McGahen v. Commissioner, 76 T.C. 468">76 T.C. 468720 F.2d 664">720 F.2d 664 (3d Cir. 1983).We note that petitioner Pastor McCurry has never permitted the church's books and records to be examined by Internal Revenue Service personnel and has refused to comply with numerous document requests with respect to the church during pre-trial discovery. He also refused to comply with a subpoena issued by this Court. Petitioners' only evidence that the church was a qualified recipient under section 170(c)(2) was the oral testimony of several petitioners on this matter. These individuals, including petitioner Pastor McCurry, have a vested interest in assuring a favorable determination. We do not, however, accept their unsubstantiated testimony that Calvary Temple*231 Church is a charitable donee within the purview of section 170(c), and accordingly hold that petitioners have failed to carry their burden of proving that their contributions to Calvary Temple Church satisfied the requirements of section 170(c). Rule 142(a).
Given this holding, we need not decide whether Calvary Temple Church is disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation or by participating in any political campaign on behalf of any candidate for public office. Petitioners' claims of discriminatory treatment were first presented in detail in petitioners' Reply Brief and are, therefore, clearly untimely. Rule 34(b)(4). There is no evidence in the record to support such claims. See
Greenberg's Express, Inc. v. Commissioner, 62 T.C. 324">62 T.C. 324Issue 3. FICATaxes The next issue for decision is whether petitioners are liable for Federal Insurance Contributions Act (FICA) taxes for any of the years in issue. As set forth in the Findings of Fact, many of the petitioners filed claims for refund of FICA taxes withheld from their wages during the years in issue. On these claims and*232 in their respective petitions, they generally contend that they have no liability for FICA taxes because they are members of a religious order. Petitioners do not further address this issue in their briefs.Respondent also does not address this issue in his brief.
In this context, we have previously held that we are without jurisdiction to decide whether FICA taxes have been erroneously withheld.
Chatterji v. Commissioner, 54 T.C. 1402">54 T.C. 1402Judd v. Commissioner, 74 T.C. 651">74 T.C. 651Issue 4. Self-Employment Taxes The next issue is whether petitioners Robert E. McCurry, Kenneth Smith and James Thompson are liable for self-employment taxes for any of the years in issue. Petitioners contend that they are not liable for self-employment taxes as members of religious orders. Petitioners' argument does not include any discussion of the applicable Internal Revenue Code sections.
Respondent contends that although ministers may obtain an exemption from self-employment taxes by timely filing an exemption application pursuant to section*233 1402(e), petitioners' failure to do so for all of the years in issue requires us to sustain the Commissioner's determinations, citing, among other cases,
Ballinger v. Commissioner, 78 T.C. 752">78 T.C. 752728 F.2d 1287">728 F.2d 1287 (10th Cir. 1984). Respondent further asserts that petitioners Kenneth Smith and James Thompson were not ministers but were self-employed as a subcontractor and a salesman, respectively, during the years in issue.We agree that petitioners' failure to file exemption applications from self-employment taxes pursuant to section 1402(e) for any of the years in issue requires us to sustain the Commissioner's determinations.Sec. 1.1402(e)-3A(a)(1), Income Tax Regs. We have previously held that such filing requirements are mandatory and must be strictly complied with to avail oneself of the exemption provision.
Ballinger v. Commissioner, 78 T.C. at 757
Issue 5. Social Security Tax DeductionsThe next issue is whether petitioners Alan Egerdahl, *234 Eric Pollard and Phillip Thomason are entitled to deductions for social security taxes allegedly erroneously withheld. Petitioners contend that if they are correct in "their claim[s] that they should be excluded from social security taxes as members of religious orders, then they should receive credit for deductions erroneously withheld." Respondent asserts that there is no provision in the Internal Revenue Code for the deduction of social security taxes; hence petitioners' claim is frivolous.
In
New Colonial Ice Co. v. Helvering, 292 U.S. 435">292 U.S. 435New Colonial Ice Co. v. Helvering, supra.
Issue 6. Additions to TaxThe final issue is the additions to tax imposed by the Commissioner pursuant to sections 6651(a)(1), 6653(a) and*235 6654. Petitioners have the burden of proving that any additions to tax set forth in their statutory notices are improper.
Axelrod v. Commissioner, 56 T.C. 248">56 T.C. 248The first category of additions to tax are those imposed pursuant to section 6651(a)(1) for failure to timely file Federal income tax returns for the years in issue. With respect to those petitioners who filed otherwise valid returns tardily, no explanation or proof was offered to show that their failure to timely file such returns was due to reasonable cause and not due to willful neglect. Accordingly, those petitioners have failed to carry their burden of proof, and the Commissioner's determinations are sustained. Rule 142(a). With respect to those petitioners who filed Forms 1040, U.S. Individual Income Tax Returns, with various constitutional objections typed in the blanks requesting financial data, the law is clear that such documents do not constitute valid returns and the imposition of additions to tax for such filings is appropriate when, are here, no reasonable justification is offered for the filing of such documents.
Thompson v. Commissioner, 78 T.C. 558">78 T.C. 558The second category of additions to tax are those imposed pursuant to section 6653(a) for the underpayment of tax as the result of negligence or the intentional disregard of rules and regulations. Again, the burden of proving that no part of the underpayments was due to negligence is upon petitioners.
Rosano v. Commissioner, 46 T.C. 681">46 T.C. 681The final category of additions to tax are those imposed pursuant to section 6654 for failure to pay estimated income tax. Petitioners bear the burden of proving the Commissioner's determinations to be erroneous. Many of the petitioners filed forms with their employers claiming excessive allowances for the years in issue. Petitioners offered no proof on this matter; hence the Commissioner's*237 determinations are sustained.Rule 142(a).
Finally, although many of the petitioners have sought an award of attorney fees and costs, this Court cannot lawfully grant such relief in the immediate proceedings. Decisions will be entered for the respondent in docket Nos. 9634-78, 12467-79, 13797-79, 5137-80, 5209-80, 11203-80, 11204-80, 11326-80, 11557-80, 12091-80, 3329-81, 7482-81, 25426-81, 25428-81, 25496-81, 25610-81, 25615-81, 7530-82, 12738-82, 19015-82, 19263-82, 19272-82, 19281-82, 19285-82, 19291-82, 19833-83, 19887-82, 1945-83, 2042-83, 2138-83, and 2178-83.
Decisions will be entered under Rule 155 in Docket Nos. 15293-80 and 15294-80. Footnotes
1. Cases of the following petitioners were consolidated herewith for trial, briefing and opinion: Kenneth R. Smith, docket No. 12467-79; John Wesley Foshee, Jr., docket No. 13797-79; Phillip R. Brooks and Sharon O. Brooks, docket No. 5137-80; David D. Sutton, docket No. 5209-80; Larry McEver, docket No. 11203-80; Harold H. Johnston and Josephine E. Johnston, docket No. 11204-80; James F. Thompson, docket No. 11326-80; Michael W. Barton, docket No. 11557-80; Robert E. Dollar, Jr. and Linda Dollar, docket No. 12091-80; Robert E. McCurry, docket No. 15293-80; Evelyn E. McCurry, docket No. 15294-80; Robert D. McCurry and Phyllis E. McCurry, docket No. 3329-81; Robert D. May and Jeanne W. May, docket No. 7482-81; Harold H. Johnston and Josephine E. Johnston, docket No. 25426-81; Phillip R. Brooks and Sharon O. Brooks, docket No. 25428-81; Roger D. Schroeder and Nancy L. Schroeder, docket No. 25496-81; James F. Thompson, docket No. 25610-81; Philip D. Thomason, docket No. 25615-81; Robert D. May, docket No. 7530-82; David D. Sutton, docket No. 12738-82; Phillip R. Brooks, docket No. 19015-82; Robert E. Dollar Jr., Docket No. 19263-82; Eric A. Pollard, docket No. 19272-82; Harold H. Johnston and Josephine Johnston, docket No. 19281-82; Roger D. Schroeder and Nancy L. Schroeder, docket No. 19285-82; Philip D. Thomason and Anita J. Thomason, docket No. 19291-82; Alan D. Egerdahl and Karen L. Egerdahl, docket No. 19833-82; James F. Thompson, docket No. 19887-82; Philip D. Thomason and Anita J. Thomason, docket No. 1945-83; Phillip R. Brooks and Sharon Brooks, docket No. 2042-83; Robert D. McCurry, Sr. and Phyllis E. McCurry, docket No. 2138-83; and Eric A. Pollard and Lee F. Pollard, docket No. 2178-83.↩
2. All section references are to the Internal Revenue Code of 1954, as amended and in effect for the years in issue, and all rule references are to this Court's Rules of Practice and Procedure.↩
3. Although we may, for convenience, refer to these groups as "religious orders," we decline to find as a fact that they are, indeed, religious orders as that term is used in the Internal Revenue Code and attendant regulations.↩
4. The latest revenue ruling pertaining to vows of poverty is
Rev. Rul. 84-13, 4 I.R.B. 5">1984-4 I.R.B. 5↩ .5. An even greater factual similarity exists between petitioners and the taxpayers in
Greeno v. Commissioner, T.C. Memo. 1981-521↩6. In fact, petitioners' reply brief now contends that his basis in this property is $29,509.80.↩
7. We do not imply, however, that a mere change in title, in and of itself, is sufficient to constitute an effective relinquishment of dominion and control.↩
8. Although this Court can award attorney fees and costs pursuant to section 7430 in actions commenced after February 28, 1983, it has no similar authority with respect to proceedings begun prior to that date.
McQuiston v. Commissioner, 78 T.C. 807">78 T.C. 807711 F.2d 1064">711 F.2d 1064↩ (9th Cir. 1983).
Document Info
Docket Number： Docket Nos. 9634-78, 12467-79, 13797-79, 5137-80, 5209-80, 11203-80, 11204-80, 11326-80, 11557-80, 12091-80, 15293-80, 15294-80, 3329-81, 7482-81, 25426-81, 25428-81, 25496-81, 25610-81, 25615-81, 7530-82, 12738-82, 19015-82, 19263-82, 19272-82, 19281-82,
Citation Numbers： 48 T.C.M. 1303, 1984 Tax Ct. Memo LEXIS 137, 1984 T.C. Memo. 536
Filed Date： 10/4/1984
Precedential Status： Non-Precedential
Modified Date： 11/21/2020