Hello, IRS?

I’ve been thinking a great deal about the story of an alumnus suing Strake Jesuit because, even though he made a large contribution, his son was not admitted.

There’s so much to say!

But here’s one point I’ve not heard anyone make—this guy better be ready for a massive IRS audit. Or at least a fine.

He claims the school’s development director solicited a $100,000 gift. He pledged $50,000, and paid four of five $10,000 increments over four years. I’m guessing he claimed a tax deduction for each of those pledge payments.

You can only claim a deduction, however, if you are not getting anything of value in return, not receiving anything in consideration of the gifts. And the plaintiff very clearly spells out that he understood he was buying a guarantee that his son would be admitted to the school.

The school actually asked for $100,000, so he cannot claim that his $40,000 represented more than the value of the promise he thought he was securing with his contribution.

I’m very curious to see how this progresses. From what I read in the complaint, I think the judge may be obliged to let the questions of fact, about whether anyone representing the school actually explicitly said a gift would secure admission, and whether a parent on the fundraising committee can obligate the school, go to a jury.

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1 Response to Hello, IRS?

  1. Pingback: Weekend link dump for January 9 – Off the Kuff

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