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Rev. Rul. 1955-269 Document Info Printer

Revenue Rulings
Internal Revenue Service
 Revenue Ruling

Rev. Rul. 55-269

1955-1 C.B. 29

Sec. 170

IRS Headnote

Payments to an organization of the character described in section 501(c)(4)
of the Internal Revenue Code of 1954 for the purpose of subsidizing the
dissemination of its literature to organizations of the character described
in section 501(c)(3) of the Code are not deductible as charitable
contributions for Federal income tax purposes. 

Full Text

Rev. Rul. 55-269 

Advice has been requested concerning the deductibility of payments made to
a tax-exempt organization under the circumstances set forth below. 

The M organization is engaged in the promotion of sound and economical
Government operations. Its purposes include stimulating and developing the
economic life of the United States by encouraging Government-national,
state and local-to practice wise economy in public spending; encouraging
business leaders and others to participate in public affairs and thus
contribute to government the benefit of their experience and judgment;
assisting in the development of an informed public opinion on major
political, social and economic issues; and taking appropriate and lawful
measures to effectuate these and its other purposes. One of its principal
means of accomplishing these purposes is the printing and dissemination of
literature devoted to advocating the principles which it supports.
Occasionally, the literature may advocate or oppose pending legislation. 

The M organization has been held to be exempt from Federal income taxes
under section 101(8) of the Internal Revenue Code of 1939, now section
501(c)(4) of the 1954 Code, as an organization engaged in promoting the
welfare of mankind. Contributions to it are not deductible for Federal
income tax purposes. 

In addition to soliciting direct contributions in support of its purposes,
the M organization furnishes to prospective contributors a list of schools,
libraries and other educational, religious and similar institutions so that
in making payments to the M organization such persons may designate
particular organizations to which subscriptions to the literature published
by the M organization may be sent. The listed organizations are of the
character described in section 501(c)(3) of the 1954 Code, and
contributions to them would be deductible by donors under section 170. It
has been contended that the payments are made to the M organization as
agent of contributors for the purpose of distributing its literature to the
designated organizations and that such payments will be deductible as
contributions to such schools, libraries, etc. 

It is deemed that the above method is an indirect means of subsidizing the
dissemination of the literature produced by the M organization and
constitutes in effect a contribution to the latter organization in support
of its own purposes rather than a contribution to the recipients of the
literature. 

Accordingly, it is held that payments to the M organization, or any other
organization of the character described in section 501 (c)(4) of the 1954
Code, for the purpose of subsidizing the dissemination of its literature to
organizations of the character described in section 501(c)(3) of the 1954
Code are not deductible as charitable contributions for Federal income tax
purposes

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