
    Elsie B. Lord, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 17189.
    Promulgated December 22, 1927.
    
      Oourtlandt Nieoll, Esq., for petitioner.
    
      L. O. Mitchell, Esq., for respondent.
   Smith :

This proceeding is for the redetermination of a deficiency in income tax for the year 1921, in the amount of $437.38.

FINDINGS OF FACT.

The petitioner is an individual, residing at Morristown, N. J.

On her income-tax return for the year 1921, the petitioner reported net income in the amount of $16,816.36. She claimed a deduction of $2,967.59 for contributions, of which $2,807.59 represented contributions to the Home of Truth. The Commissioner disallowed the contributions to the Home of Truth as deductions and restored the sum of $2,807.59 to income. This action on the part of the Commissioner resulted in the disclosure of an additional tax amounting to $437.38.

The Home of Truth was founded in Boston, Mass., in the year 1919 by Eleanor Mel, who for some time previous thereto had been engaged in the study and in the teaching of religious principles similar to those underlying spiritual healing and the New Thought movement.

The work was carried on at first by Eleanor Mel with the help of a few part-time workers or associates. In 1920 one of the workers became a full-time associate and secretary of the institution, and in 1921 its activities were carried on principally by Eleanor Mel as leader and two full-time associates, one of whom. was the secretary. The building in which the Home of Truth was housed was acquired in 1920 or 1921, the title thereto being taken in the name of Eleanor Mel. In 1923 the institution was incorporated under the laws of Massachusetts as a religious corporation and in the same year Eleanor Mel was ordained a minister of the gospel. At no time did it have a charter, constitution or by-laws, and no articles of association or other formal plan of organization was ever promulgated or entered into between the founder and her associates. Members of the congregation were not required to sign any agreement or obligate themselves in any way.

The activities carried on in the name of the institution were wholly religious in their nature. A Bible school and regular periods of prayer and divine worship were conducted on Sundays by the leader. On week days courses of instruction were given in the application of the teachings of Jesus Christ to the activities of everyday life, and periods of prayer were held. The general public was invited to attend all these services. The personal services of the leader and her associates were available to the public at all times for purposes of private spiritual consultation and healing. The Home of Truth also maintained a reading room containing religious literature and information pertinent to its activities.

No charge was made for any of the services rendered by the leader or her associates. The institution had no income and depended for its financial support on contributions and gifts, some of which consisted of clothing and food. Gifts of money were made indiscriminately to the institution, the leader, or her associates. All money so received was deposited in bank to the credit of an account entitled “ Home of Truth.” Disbursements were made by checks signed by Eleanor Mel. The words “Home of Truth” were printed on all checks and stationery. Neither the leader nor any of the associates were paid a salary, the only employe of the Home of Truth receiving remuneration being the janitor. Questions relative to disbursements other than routine were discussed by the leader and her associates. In such discussions the judgment of the leader was respected, due to her greater experience, but her decisions were not necessarily final.

The petitioner’s gifts to the Home of Truth in the year 1921, amounting to $2,807.59, were contributions to a fund, none of the earnings of which inured to the benefit of any private individual and which was maintained exclusively for religious purposes.

Judgment of no deficiency will ~be entered.

Considered by Teussell, Littleton, and Love.  