Foundation of Human Understanding v. Commissioner

88 T.C. 1341 (1987)

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Foundation of Human Understanding v. Commissioner

United States Tax Court
88 T.C. 1341 (1987)

Facts

Roy Masters founded and led the Foundation of Human Understanding (foundation) (plaintiff). The foundation had its headquarters in Los Angeles and another building in Oregon. Masters promoted a path to spiritual salvation via emotional self-regulation achieved by engaging in a particular type of meditation that Masters developed. The foundation held services approximately three times a week at its two locations conducted by either Masters or one of the foundation’s eight other ministers. The services had no rigid format and varied from scriptural explications to practical advice. Typically, 50 to 350 people attended services. Meditative practice played no role in the services; followers performed the meditation in private. Prior to developing its practices of having ministers and services, the foundation established robust broadcasting and publishing systems to promote Masters’s philosophy. The foundation had a radio program with a regular listening audience of 30,000 people and a magazine with a circulation of 5,200 subscribers. The foundation applied to the Internal Revenue Service (IRS) (defendant) to be recognized as a church for the purposes of the Internal Revenue Code (code), which came with certain tax advantages compared to recognition merely as a religious organization. The IRS denied the request, and the foundation petitioned the United States Tax Court to review the IRS’s determination.

Rule of Law

Issue

Holding and Reasoning (Goffe, J.)

Dissent (Simpson, J.)

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