A lawyer for an Orthodox Jewish couple from Los Angeles claimed Monday that the Internal Revenue Service has violated the 1st Amendment by refusing to allow tax deductions for their children’s religious schooling.
The IRS should allow the deductions because it permits members of the Church of Scientology to write off the cost of spiritual counseling sessions, attorney Jeffrey Zuckerman said during the first day of a nonjury trial in U.S. Tax Court.
The 1st Amendment prohibits the IRS from discriminating on the basis of religion, Zuckerman said.
Michael and Marla Sklar brought the lawsuit after the IRS ruled their deductions were invalid because Jewish school tuition was considered payment for a service, not a charitable contribution.
Louis B. Jack, an attorney for the IRS, said during his opening statement that a ruling in the Sklars’ favor would lead “millions of Americans to start deducting religious school tuition.”
“Existing case law is clear: Deduction for religious school tuition is illegal, period,” Jack said.
Michael Sklar, an accountant, testified that he amended his 1991 tax return in 1993 to claim a portion of his children’s tuition as a charitable contribution.
“I believed it was a valid deduction,” he said. “The same benefit is given to a particular sect, Scientologists, and there’s no reason it shouldn’t be applied to someone else.”
A telephone call Monday to Monique Yingling, attorney for the Church of Scientology International, was not immediately returned. The church, which was founded in 1954 by science fiction writer L. Ron Hubbard, is not a party to the lawsuit.
Sklar amended his return after the IRS in 1993 reached a private agreement with the Church of Scientology, giving it tax-exempt status. The agreement marked the end of a decades-long dispute characterized by Scientologists as a “war” against the IRS. Sklar was allowed to claim the deduction for several years, but after an audit of his 1994 return, the IRS disallowed the deduction.
The Sklars sued in 1997 and the case ended up in tax court, where Sklar represented himself and lost.
He appealed the ruling, but a three-judge panel of the U.S. 9th Circuit Court of Appeals upheld the tax court ruling.
Sklar argued that the tuition was a charitable contribution and could be deducted because his children received an “intangible religious benefit.”
The lawsuit now before Judge John O. Colvin was filed in 2001 over a 1995 tax return in which the Sklars claimed about $15,000 in religious deductions for four of their children. The couple would have saved about $3,200 in taxes.
Zuckerman said that during the trial he would show the similarities between Scientology’s religious instruction and that received by the Sklar children.
“Every practitioner of every religion has the right to deduct religious instruction, if the Church of Scientology is allowed to do that,” Zuckerman said.
Colvin will not allow testimony in the case from the Church of Scientology, Zuckerman said.