Taxing Lessons Case Summaries

Case — Charitable Contribution Deduction

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TL Case Summ


Can an attorney take a tax deduction for case materials donated to a charity?


Taxpayer Says:  Case files relating to the Oklahoma City bombing that were donated to the University of Texas are eligible for a charitable contribution deduction.

Internal Revenue Service Says:  The case files did not belong to the taxpayer (an attorney), making the gift invalid and the deduction not allowable.


From Internal Revenue Code Section 170(a)(1):  There shall be allowed as a deduction any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary.

From Internal Revenue Code Section 170(c): Charitable contribution defined – “For purposes of this section, the term “charitable contribution” means a contribution or gift to or for the use of—[list of eligible organizations omitted because there is no dispute as to eligibility of the university as a qualified charitable organization]

From DeJong v. Commissioner, 36 T.C. 896, 899 (1961): As used in Internal Revenue Code Section 170, the term “charitable contribution” is synonymous with the word “gift.” A gift is generally defined as a voluntary transfer of property by the owner to another without consideration therefor.

From Ragan v. Citizens’ State Bank, 131 P. 1093 (Okla. 1913): As a general rule under Oklahoma law, possession of personal property is, if unexplained, prima facie evidence of ownership.

From Rule 1.6 (a) of the Oklahoma Rules of Professional Conduct: A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation * * *


One of the requirements for making a valid gift under Federal tax law is beneficial legal ownership, but “ownership” is not defined under Federal tax law.

In applying Federal tax law, State law (in this case, Oklahoma) controls in determining the nature of a taxpayer’s legal interest in property. State law creates legal interests, while Federal law determines when and how those interests are taxed. In order to make a valid gift for Federal tax purposes, a transfer must at least effect a valid gift under applicable State law.

Taxpayer believes possession equates to ownership under Oklahoma law. The Internal Revenue Service contends an attorney acts as an agent on behalf of a client, so client records belong to the client and are not the personal property of the attorney.


Make your selection, then see “The Court’s Decision” below for a full explanation

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HL Carpenter, an experienced investor and a CPA, specializes in reader friendly articles on taxes and investing for individuals and small businesses, and publishes two newsletters: Taxing Lessons and Top Drawer Ink. Visit and

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Sorry, wrong answer :(
Right answer!
For the IRS. Though no specific statute was on point, the Court determined from various court cases that under Oklahoma law, property held by an attorney in the scope of representing his client belongs to the client. Since the attorney/taxpayer is not the legal owner of the case materials, he cannot make a valid gift or take a charitable deduction for the donation.