New Life Tabernacle v. Commissioner

44 T.C.M. 309 (1982)

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New Life Tabernacle v. Commissioner

United States Tax Court
44 T.C.M. 309 (1982)

Facts

Members of the New Life Tabernacle (church) (plaintiff) turned over their income to the church, which treated the funds as a common treasury to provide members with necessities of daily living, including housing, food, clothing, and transportation. The church did not solicit donations from the public, and the funds transferred by members were the church’s only source of revenue. The commissioner of internal revenue (commissioner) (defendant) determined that the church did not satisfy the private-inurement test and denied the church’s application for exemption from income taxation. The church sought a declaratory judgment that it was entitled to the exemption, arguing that (1) the church was operated exclusively for three exempt purposes, charitable, religious, and educational; and (2) the expenditures for members were in lieu of compensation for the members’ services to the church. The church did not identify specific services rendered or provide information to determine a reasonable rate of pay for such services.

Rule of Law

Issue

Holding and Reasoning (Chabot, J.)

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