Rev. Rul. 54-580

Advice has been requested whether payments for tuition made on behalf of children attending parochial, or other types of church sponsored schools are deductible as contributions or gifts under section 23(o) of the Internal Revenue Code of 1939.

Section 23(o) of the Code provides that in computing net income there shall be allowed as deductions, in the case of an individual, contributions or gifts payment of which is made within the taxable year to or for the use of specified organizations organized and operated exclusively for religious, educational, etc., purposes, to an amount which, in all cases in section 23(o) of the Code combined, does not exceed 20 percent of the taxpayer's adjusted gross income.

In Katherine M. Channing v. United States , 4 Supp. 33, affirmed 67 F.(2d) 986, certiorari denied 291 United States 686, the Court held that tuition paid to educational institutions for the education of the taxpayer's daughter was not deductible as a contribution.

In S. E. Thomason v. Commissioner , 2 T.C. 441, the Tax Court held that amounts paid for the benefit of, and to provide special advantages for, a particular child in the Illinois Children's Home and Aid Society, were not deductible as charitable contributions.

The amounts paid in the instant case likewise were made for the benefit of a particular child or children and, therefore, cannot be regarded as contributions or gifts to the organizations involved in operating the schools. However, payments made to or for the use of such organizations in carrying out their general purposes and not in any way earmarked for the benefit of particular children would constitute deductible contributions or gifts under section 23(o) of the Code.

In view of the foregoing, it is held that the tuition paid for children attending parochial, or other types of church sponsored schools does not constitute `gifts' or `contributions' paid to or for the use of the organizations operating such schools within the meaning of section 23(o) of the Code, and that deduction of such tuition is not allowable in computing net income for Federal income tax purposes.