Rev. Rul. 1981-307
Rev. Rul. 81-307 1981-2 C.B. 78, 1981-52 I.R.B. 8. Internal Revenue Service Revenue Ruling CHARITABLE CONTRIBUTION; REWARD MONEY TO A POLICE DEPARTMENT Published: December 28, 1981 26 CFR 1.170A-1: Charitable, etc., contributions and gifts; allowance of deduction Charitable contribution; reward money to a police department. A contribution of reward money by a parent of a murdered individual to the police department of a political subdivision for information leading to the conviction of the murderer is for exclusively public purposes and is deductible under section 170 of the Code. ISSUE Is a contribution of a reward, as described below, deductible under section 170 of the Internal Revenue Code? FACTS A was murdered in 1980. B, A's parent, contributed 10x dollars to the police department of CI to be used as a reward for information leading to the conviction of A's killer or killers. If the money is not used to pay the reward, the police department will use the money for exclusively public purposes. CI is a political subdivision described in section 170(c)(1) of the Code. LAW AND ANALYSIS Section 170(a)(1) of the Code allows as a deduction any charitable contribution made during the tax year. Section 170(c)(1) of the Code defines a charitable contribution as a contribution or gift to or for the use of a state, a possession of the United States, any political subdivision of a state or possession, the United States, or the District of Columbia, but only if the contribution or gift is made for exclusively public purposes. Rev. Rul. 67-446, 1967-2 C.B. 119, holds that contributions are for 'exclusively public purposes' when made to a city to enable it to provide railroad companies with new facilities outside the city in exchange for the railroads' removal of their inner-city facilities and relinquishment of their right of way through the city. The revenue ruling states that although merchants and owners of property in the city who make contributions may receive some benefit from the removal of the railroad facilities, any benefit is incidental in comparison to the benefits accruing to the public at large. See also: Rev. Rul. 79-323, 1979-2 C.B. 106; and Rev. Rul. 69-90, 1969-1 C.B. 63. Rev. Rul. 74-246, 1974-1 C.B. 130, concerns an organization that makes funds available to a police department to assist the department, as a regular part of its operations, in offering rewards for information leading to the apprehension and conviction of persons engaging in criminal activity within a particular community. The revenue ruling states that providing funds to enable a police department to perform its regular duties assists the government in carrying out its function. The establishment of the reward in this case helps the police department of CI maintain the public safety and assists it in carrying out its governmental functions. Therefore, the reward serves an exclusively public purpose and any benefit B receives from the conviction of A's killer or killers is incidental in comparison to the benefits accruing to the public at large. HOLDING The contribution of 10x dollars by B to the police department of CI is deductible as a charitable contribution in the manner and to the extent provided under section 170 of the Code. Rev. Rul. 81-307, 1981-2 C.B. 78, 1981-52 I.R.B. 8.
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