The opinion
T.C. Memo. 1997-518
UNITED STATES TAX COURT
WOMEN OF THE MOTION PICTURE INDUSTRY, ET AL.,1 Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 11227-96, 11581-96, Filed November 17, 1997.
11918-96, 11919-96,
11921-96.
Ronald E. Ingalls, for petitioners.
Christina D. Moss, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
GOLDBERG, Special Trial Judge: This case was heard
pursuant to section 7443A(b)(3) and Rules 180, 181, and 182.2
1
Cases of the following petitioners are consolidated herewith
for purposes of trial, briefing and opinion: Family Service of
El Paso, Inc., docket No. 11581-96; Schoenstatt, Inc., docket No.
11918-96; Amarillo Council on Alcoholism and Drug Abuse, docket
No. 11919-96; and Waldorf School Association of Texas, Inc.,
docket No. 11921-96.
2
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
(continued...)
2
Respondent determined deficiencies in Federal income taxes as
follows:
Women of the Motion Picture Industry (WMPI):
Tax Year Ending Deficiency
June 30, 1990 $2,435.00
Family Service of El Paso, Inc. (FSEP):
Tax Year Ending Deficiency
Dec. 31, 1989 $1,471.00
Dec. 31, 1990 2,166.00
Schoenstatt, Inc. (Schoenstatt):
Tax Year Ending Deficiency
Sept. 30, 1988 $ 564.00
Sept. 30, 1989 2,092.00
Sept. 30, 1990 1,993.00
Sept. 30, 1991 2,168.00
Amarillo Council on Alcoholism and Drug Abuse (ACADA):
Tax Year Ending Deficiency
Dec. 31, 1989 $2,707.00
Waldorf School Association of Texas, Inc. (WSA):
Tax Year Ending Deficiency
Dec. 31, 1987 $ 735.00
Dec. 31, 1988 4,017.00
Dec. 31, 1989 5,208.00
After concessions set forth infra, the issues for decision
are whether (1) petitioners FSEP, Schoenstatt, ACADA, and WSA are
entitled to business expense deductions from unrelated business
taxable income (UBTI) for amounts allegedly expended for
charitable purposes in excess of amounts conceded by respondent,
2
(...continued)
Procedure.
3
and (2) whether petitioners' charitable expenditures are fully
deductible as business expenses under section 512.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated by this reference. Each of the petitioners
conducted its principal activities in the State of Texas at the
time its petition was filed.
WMPI is an unincorporated association recognized by the
Internal Revenue Service (IRS) as exempt from taxation under
section 501(c)(6). FSEP, Schoenstatt, ACADA, and WSA are non-
profit corporations incorporated under the laws of the State of
Texas and are recognized by the IRS as exempt from taxation under
section 501(c)(3). Each of the petitioners was recognized as
exempt during the years in issue.
During the years in issue, petitioners were licensed by the
State of Texas to conduct bingo activities. Thus, each was
authorized to conduct bingo and "instant bingo" under the Bingo
Enabling Act (the Act), Tex. Rev. Civ. Stat. Ann. art. 179d (West
1987 & Supp. 1990), and each was in compliance with the Act.
Until 1990, the Texas Comptroller of Public Accounts was
responsible for the regulation of bingo. As of January 1, 1990,
the regulation of bingo was transferred to the Texas Alcoholic
Beverage Commission.
4
"Instant bingo" is a game of chance. A participant places a
wager by purchasing a card, the front of which is preprinted with
bingo card patterns and is covered with pull-tabs. The
participant removes the pull-tabs, and if the patterns revealed
on the front of the card match the winning patterns preprinted on
the back of the card, a prize is payable. A winning participant
collects the prize from a cashier or an usher.
Petitioners each leased premises for the purpose of
conducting bingo and "instant bingo" (sometimes referred
collectively as bingo activities) and carried on these bingo
activities approximately 3 times per week during the years in
issue. Petitioners' bingo activities were not substantially
related to their exempt functions or purposes.
Each petitioner maintained a separate checking account
(referred to as the bingo account) into which the gross proceeds
less prizes paid from bingo activities were deposited. During
the years in issue, petitioners made payments to outside
charities from bingo proceeds held in each organization's bingo
account. In addition, FSEP, Schoenstatt, ACADA, and WSA
transferred bingo proceeds from their respective bingo accounts
into their respective general operating bank accounts (referred
to as general accounts or general funds) for their organizations
during the years in issue. Some of these proceeds were paid to
third parties during the taxable years in issue. During the
5
taxable years 1989 and 1990, FSEP transferred bingo proceeds from
its bingo account to a savings account.
Each licensed organization had to disburse a minimum amount
of its bingo proceeds for charitable purposes on a quarterly
basis. The agency responsible for regulating bingo calculated
the quarterly minimum for licensed organizations and notified the
organizations of the amount required to be disbursed.
The parties have stipulated the amount of gross receipts
received from petitioners’ bingo and "instant bingo" activities.
The parties also have stipulated the amount of expenses and
distributed proceeds attributable to petitioners' "instant bingo"
activities based upon the proportion of gross receipts generated
by "instant bingo" to the total gross receipts received from
petitioners' bingo activities. The gross receipts and expenses
attributable to petitioners "instant bingo" activities are set
forth in Appendix A and incorporated in these findings of facts.
In addition to proceeds from bingo and "instant bingo", WSA
received amounts from dauber3 sales as set forth in Appendix A.
Petitioners' distributions from their bingo accounts and the
minimum charitable distribution requirements under Texas law for
each petitioner are set forth in Appendix B and incorporated in
these findings of facts. In addition to the amounts set forth in
Appendix B, in 1989 WSA made payments totaling $1,237.60 from its
general account to Kirsten Sotebier for her work as a bookkeeper.
3
A dauber is an inking device used to mark bingo cards.
6
Petitioners filed Forms 990, Returns of Organization Exempt
from Income Tax, for the years in issue. ACADA and WSA reported
using the cash receipts and disbursements method of accounting,
and FSEP reported using the accrual method of accounting. On
Form 990 filed for the tax year 1989, WSA reported proceeds from
dauber sales in the amount of $29,449.11 and from cafeteria sales
in the amount of $6,193.99, in addition to proceeds from bingo
games.
Petitioners did not file Forms 990T, Exempt Organization
Business Income Tax Returns, during the years in issue. In the
notices of deficiencies, respondent determined that petitioners
were liable for tax on UBTI with respect to petitioners' "instant
bingo" activities. Respondent allowed deductions for prizes paid
and expenses paid related to petitioners' "instant bingo"
activities in computing petitioners' UBTI. Respondent did not
allow any deductions for amounts expended or contributed by
petitioners for charitable purposes.
The parties agree that the receipts generated by
petitioners' "instant bingo" activities constitute UBTI under
section 511(a). See Julius M. Israel Lodge of B'nai B'rith No.
2113 v. Commissioner, T.C. Memo. 1995-439, affd. 98 F.3d 190 (5th
Cir. 1996). Respondent concedes that petitioners are entitled to
deductions under sections 162(a) and 512(a) in computing their
7
UBTI for amounts paid to outside charities or expended for
charitable purposes as follows:
WMPI:4
Tax Year Ended Deduction
June 30, 1990 $5,965
FSEP:
Tax Year Ended Deduction
Dec. 31, 1989 $1,045
Dec. 31, 1990 5,959
Schoenstatt:
Tax Year Ended Deduction
Sept. 30, 1990 $387
Sept. 30, 1991 755
ACADA:
Tax Year Ended Deduction
Dec. 31, 1989 $5,028
WSA:
Tax Year Ended Deduction
Dec. 31, 1987 $ 2,462
Dec. 31, 1988 7,373
Dec. 31, 1989 13,855
The amounts conceded by respondent include payments made directly
to outside charities and amounts paid from petitioner's general
funds which the parties agree are attributable to "instant bingo"
proceeds. Respondent also concedes that WSA is entitled to
deductions against UBTI under sections 170 and 512(b)(10) in the
4
The parties have stipulated all amounts necessary to compute
WMPI's UBTI for the year ended June 30, 1990. No issue remains
with respect to WMPI.
8
amounts of $343, $2,014, and $2,186 for the tax years 1987, 1988,
and 1989, respectively.
OPINION
Respondent's determinations are presumed correct, and
petitioners have the burden of proving them erroneous. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Further,
deductions are a matter of legislative grace, and petitioners
must prove entitlement to any deductions claimed. INDOPCO, Inc.
v. Commissioner, 503 U.S. 79, 84 (1992). Taxpayers must maintain
adequate records to substantiate the amount of any deductions
claimed. Sec. 6001; sec. 1.6001-1(a), Income Tax Regs.
Under section 512(a), each petitioner's UBTI from its
"instant bingo" activity is computed as the gross income derived
therefrom, less the deductions allowed by Chapter 1 which are
directly connected with carrying on this activity, subject to the
modifications contained in section 512(b). As relevant here,
section 512(b) provides that any deduction allowed under section
170 shall be allowed in computing UBTI, but such deduction is
limited to 10 percent of UBTI computed without regard to such
deduction. Sec. 512(b)(10).
Section 162 allows a deduction for all ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business. Section 170 allows a deduction
for any charitable contribution or gift, as defined therein, paid
9
in the taxable year. In order to be fully deductible under
section 512(a), petitioners' claimed items of deduction must
qualify for deduction as business expenses under section 162
rather than as charitable contributions under section 170, South
End Italian Independent Club, Inc. v. Commissioner, 87 T.C. 168,
175 (1986), and must have a proximate and primary relationship to
the carrying on of petitioners' "instant bingo" activities, sec.
1.512(a)-1(a), Income Tax Regs.
The State of Texas authorizes qualified organizations to
conduct bingo and "instant bingo" games. Under Texas law, net
proceeds from bingo activities must be devoted to "charitable
purposes". Tex. Rev. Civ. Stat. Ann. art. 179d, sec. 11(d) (West
1987 & Supp. 1990).5 Under the Act and the rules and regulations
promulgated thereunder, by the end of each quarter an
organization must disburse an amount equal to 35 percent of the
adjusted gross receipts from the last preceding quarter, less a
certain amount of authorized expenses.6 Renewal of a license may
5
Sec. 11(d) of the Bingo Enabling Act, as effective for the
years 1987 through 1989, provided in part: "The net proceeds of
any game of bingo * * * shall be exclusively devoted to the
charitable purposes of the organization permitted to conduct the
game." Tex. Rev. Stat. Ann. art. 179(d), sec. 11(d) (West 1987).
In 1990, the sec. was amended to provide in part: "The net
proceeds of any game of bingo * * * shall be exclusively devoted
to charitable purposes." Tex. Rev. Stat. Ann. art. 179(d), sec.
11(d) (West Supp. 1990).
6
In 1987, the bingo rules required: "By the end of each
quarter, each licensed authorized organization shall disburse for
charitable purposes an amount not less than 35 percent of the
(continued...)
10
be denied if an organization fails to dispose of proceeds in
accordance with the provisions of the Act. Tex. Rev. Civ. Stat.
6
(...continued)
organization's adjusted gross receipts from the last preceding
quarter." Tex. Admin. Code tit. 34, sec. 3.556 (1987). The term
"adjusted gross receipts" was defined as gross receipts less the
amount of prizes awarded. Id. Effective Jan. 1, 1988, the Rules
were amended. Sec. 3.556 of the Tex. Admin. Code provided:
(a) For the purposes of this section, the term
"adjusted gross receipts" means gross receipts less the
amount awarded as prizes.
(b) By the end of each quarter, each licensed
authorized organization shall disburse for charitable
purposes, an amount not less than 35 percent of the
organization's adjusted gross receipts from the last
preceding quarter, less the credits allowed under subsection
(c) of this section.
(c) The amount paid as bingo taxes for the last
preceding quarter and an amount for basic fixed expenses
equal to 2.75 percent of the gross receipts for the last
preceding quarter shall be allowed as a credit towards the
required 35 percent charitable distribution.
Effective Aug. 21, 1988, sec. 3.556 was repealed, and sec.
3.555 was adopted containing similar terms. In 1990 this
requirement was codified.
As effective Jan. 1, 1990, the Act requires that:
Before the end of each quarter, each licensed authorized
organization shall disburse for charitable purposes an
amount not less than 35 percent of the organization's
adjusted gross receipts from the last preceding quarter,
less the amount of any credits allowed by rule for bingo
gross receipts, taxes, and authorized expenses. For
purposes of this subsection, adjusted gross receipts means
gross receipts plus any consideration received from the
rental of premises for bingo by the authorized organization,
less the amount of prizes paid in the preceding quarter. If
a licensed authorized organization fails to meet the
requirements of this subsection for a quarter, the
commission in applying appropriate sanctions may consider
whether, taking into account the amount required to be
distributed during that quarter and the three preceding
quarters and the charitable distributions for each of those
quarters, the organization has distributed a total amount
sufficient to have met the 35 percent requirement for that
quarter and the three preceding quarters combined.
Tex. Rev. Civ. Stat. Ann. art. 179d, sec. 19a(k) (West 1990).
11
Ann. art. 179d, sec. 13(c)(4) (West 1987 & Supp. 1990). A
license may be suspended or revoked for failure to comply with
the Act. Tex. Rev. Civ. Stat. Ann. art. 179d, sec. 16(b) & (e)
(West Supp. 1990).
The term "charitable purposes" is defined in the Act as one
or more causes, deeds, or activities that (1) benefit the needy
of Texas by, among other things, promoting their opportunity for
religious or educational advancement, relieving disease or
suffering, or by contributing to their physical well-being; or
(2) initiate, perform or foster public works in Texas. Tex. Rev.
Civ. Stat. Ann. art. 179d, sec. 2(9) (West 1987 & Supp. 1990).
In addition, the term "charitable purposes" is defined to include
organizational and administrative activities that assist the
licensed authorized organization in furthering those charitable
purposes listed in section 2(9) of the Act provided that the
activity relates to a purpose which is consistent with the stated
purposes of the organization.7 Tex. Admin. Code tit. 34, sec.
3.544 (1987, 1988, 1989 & 1990).
Under the Act, a licensed organization is required to
establish and maintain one regular checking account designated
the "bingo account". Tex. Rev. Civ. Stat. Ann. art. 179d, sec.
7
Expenditures for services rendered and materials purchased
for the conduct of bingo by the organization are not considered
distributions for charitable purposes. Tex. Admin. Code tit. 34,
sec. 3.544 (1987); Tex. Admin. Code tit. 34, sec. 3.544 (1988);
Tex. Admin. Code tit. 34, sec. 3.544 (1989); Tex. Admin. Code
tit. 34, sec. 3.544 (1990).
12
19a(a) (West 1987 & Supp. 1990). The Act requires that "All
funds derived from the conduct of bingo, less the amount awarded
as cash prizes, shall be deposited in the bingo account. No
other funds may be deposited in the bingo account."8 Id. Checks
may be drawn on the bingo account for the payment of: necessary
expenses and compensation incurred and paid in connection with
the conduct of bingo; "the disbursement of net proceeds derived
from the conduct of bingo to charitable purposes"; and the
transfer of net proceeds derived from the conduct of bingo to a
designated bingo savings account pending a disbursement to a
charitable purpose. Tex. Rev. Civ. Stat. Ann. art. 179d, sec.
19a(c) (West 1987 & Supp. 1990). The transfer of gross receipts
derived from the conduct of bingo to another account maintained
by an organization is not permitted except as provided in section
19a(c). Tex. Rev. Civ. Stat. Ann. art. 179d, sec. 19a(f), (g)
(West 1987 & Supp. 1990). Gross receipts derived from the
conduct of bingo may not otherwise be commingled with other funds
of the licensed organization. Id.
FSEP, Schoenstatt, ACADA, and WSA - Substantiation
Although we do not believe the matter to be free from doubt,
petitioners and respondent agree that the transfer of bingo
proceeds from an organization's bingo account to its general fund
8
In 1990, this section was amended to provide that with prior
approval, a licensed organization may lend funds from its general
fund to its bingo account. Tex. Rev. Civ. Stat. Ann. art. 179d,
sec. 19a(a) (West 1990).
13
is a charitable disbursement under Texas law. Based on this
proposition, FSEP, Schoenstatt, ACADA, and WSA argue that they
are entitled to deductions for all the proceeds from their
"instant bingo" activities transferred to their general accounts.
Petitioners argue that such transfers are not distinguishable
from payments to outside charities. Petitioners assert that each
organization's general funds were used only for exempt purposes.
Petitioners argue that these amounts are deductible as business
expenses pursuant to sections 162(a) and 512(a).
Respondent counters that in order to be entitled to
deductions under sections 162(a) and 512(a), petitioners must
establish that any amounts claimed were actually paid from their
general fund or account for charitable purposes during the years
in issue and that the amounts paid were attributable to "instant
bingo" proceeds. Respondent contends that petitioners have
failed to establish that they expended amounts from "instant
bingo" proceeds transferred to their general accounts in excess
of those stipulated by the parties.
We do not agree with petitioners that a transfer of proceeds
from one account of an organization to another account of the
same organization is equivalent to a payment to an outside
charity for Federal tax purposes, or more precisely for the
purposes of sections 162(a) and 512(a). Whether the transfers
qualified as disbursements for purposes of the Texas Act is not
dispositive of the Federal tax consequences. Pursuant to section
14
461, a deduction allowed by section 162 "shall be taken for the
taxable year which is the proper taxable year under the method of
accounting used in computing taxable income." In the opening
brief, respondent asserts that petitioners used the cash basis to
determine UBTI. Petitioners have not objected to respondent's
assertion in their reply brief. However, based on the Forms 990,
it appears FSEP used the accrual method of accounting, and we
shall decide the issue accordingly.
Section 162 grants a deduction for ordinary and necessary
business expenses that are "paid or incurred during the taxable
year." Generally, a cash basis taxpayer may deduct business
expenses only in the taxable year in which the expenses are paid.
Sec. 1.461-1(a)(1), Income Tax Regs. An accrual basis taxpayer
generally may deduct expenses in the taxable year in which a
liability is incurred. Sec. 1.461-1(a)(2), Income Tax Regs. A
liability is incurred in the taxable year in which: (1) All the
events have occurred that establish the fact of the liability;
(2) the liability can be determined with reasonable accuracy; and
(3) economic performance has occurred with respect to the
liability. Id.; sec. 461(h).
We think that the transfer of "instant bingo" proceeds to an
organization's general fund is no more deductible than would be a
contribution to a reserve for future liabilities.
the case law has long followed the principle that a
contribution to a reserve for future liabilities is not
deductible; only actual payment out of the reserve to
15
satisfy a definite liability can give rise to a deductible
expense. Whether the reserve payments are mandatory is not
dispositive of the issue of their deductibility. * * * In
Hradesky, we held that a cash basis taxpayer's required
payment of real estate taxes in escrow is not a deductible
payment until payment out of escrow is made to satisfy the
taxpayer's tax liability. Until payment is made of an
actual liability that is due, no deductible expense exists.
This rule has been followed for more than 60 years. * * *
Sebring v. Commissioner, 93 T.C. 220, 225-226 (1989) (citations
omitted).
Sections 162(a) and 512(a) do not allow petitioners to take
business expense deductions for funds deposited into their own
operating accounts. FSEP, Schoenstatt, and ACADA have not
established that they are entitled to deductions with respect to
"instant bingo" in excess of amounts allowed by respondent.
WSA has established that it paid $1,237.60 to its bookkeeper
during 1989. Respondent argues that WSA has failed to establish
that any portion of this amount is allocable to "instant bingo"
and that the amount allocable to WSA's tax-exempt income is not
deductible. Sec. 265. We find that WSA is entitled to a
deduction under sections 162(a) and 512(a) in the amount
determined by applying the ratio which WSA's instant bingo
proceeds bear to its total gross proceeds to the total fees of
$1,237.60.
Excess Contributions
The remaining issue for decision is whether WSA is entitled
to deduct as a business expense the entire amount of its payments
to outside charities.
16
Respondent argues that Texas law only requires that 35
percent of net "instant bingo" proceeds from the prior quarter be
expended for charitable purposes and that any payments in excess
of the 35-percent requirement (excess contributions) were
voluntary and not directly connected with petitioners' "instant
bingo" activities, and thus are not deductible under sections
162(a) and 512(a).
Petitioners argue that their position is supported by South
End Italian Independent Club, Inc. v. Commissioner, 87 T.C. 168
(1986). On the other hand, respondent maintains that this case
is distinguishable from South End Italian Independent Club, Inc.
with respect to excess contributions.
In South End Italian Independent Club, Inc., the Court
considered whether a social club’s donations from beano game
proceeds were deductible as business expenses in determining
UBTI. Massachusetts law provided that the profits from beano
"'shall be used for charitable, religious or educational
purposes, and shall not be distributed to the members of such
organization.'" Id. at 169 (quoting Mass. Gen. Laws Ann. ch. 10,
sec. 38 (West 1980). In holding that the donations were not
charitable contributions, the Court stated:
First, petitioner’s payments were made in compliance
with a Massachusetts law requiring the donation of the "Net
Proceeds" of petitioner's beano games. Given the legal
compulsion surrounding petitioner's making of the donations,
they can hardly qualify as voluntary charitable
contributions. * * *
17
Further, the Club's beano license could be revoked if
petitioner were to violate the donation requirement of the
Massachusetts Beano Law. Accordingly, obtaining the
assurance that its license would not be revoked for failure
to comply with that requirement was itself a quid pro quo
for the donations. * * *
Id. at 176. The Court held that the donations "were clearly
necessary, in the strict sense of the word, to the lawful conduct
of beano games by petitioner since they were required by
Massachusetts law as a condition to the retention of its license
to operate such games." Id. at 177. The donations were held to
be currently deductible as ordinary and necessary expenses under
section 162 "in the nature of an annually recurring license
expense." Id. The taxpayer was allowed a deduction under
section 512(a) for the entire amount of donations paid.
Respondent argues that South End Italian Independent Club,
Inc. v. Commissioner, supra, is distinguishable based upon the
Massachusetts regulations. Respondent argues that it appears
that the Court interpreted Massachusetts law as requiring the
taxpayer to distribute its entire net proceeds for lawful
purposes on an annual basis in order to retain its bingo
license.9 For support, respondent construes the regulations,
Mass. Regs. Code tit. 961, sec. 3.05(3)(a)(3)(1980), as providing
that the balance of unexpended net proceeds in an organization's
9
As a factual matter, there is some indication that the
taxpayer in South End Italian Independent Club, Inc. v.
Commissioner, 87 T.C. 168 (1986), did not distribute its entire
net proceeds on an annual basis. See id. at 171 & n.3.
18
beano account could not exceed the lesser of $50,000 or the
amount of net proceeds reported on the organization's annual
report most recently filed annual report. Respondent argues that
the Texas Act is distinguishable in that section 11(d) of the Act
does not require that net proceeds be devoted to charitable
purposes within a particular taxable year.
In our view, respondent is attempting to narrow the holding
of South End Italian Independent Club, Inc. v. Commissioner,
supra. Respondent relies on a temporal constraint that is not
expressed in the Court's opinion. Further, we do not infer from
the Court's opinion that such a requirement was necessarily
contemplated. See supra note 9.
In addition, it is clear WSA risked losing its bingo license
if it used any part of its net bingo proceeds, above or below the
minimum amount, for other than charitable purposes. Respondent
contends that an organization's license will not be suspended if
the organization makes the minimum charitable disbursements.
However, an organization must also comply with section 11(d) of
the Act which requires that net proceeds from bingo be devoted to
charitable purposes. If the agency responsible for regulating
bingo finds that an organization has disbursed funds for a
purpose other than for payment of expenses allowed under the Act
or for charitable purposes, the agency will issue a "show
compliance letter." Administrative actions thereafter may lead
to revocation or suspension of such organization's license.
19
Thus, by making the contributions, WSA obtained the assurance
that its bingo license would not be revoked or suspended, and the
assurance was quid pro quo for the contributions. See South End
Italian Independent Club, Inc. v. Commissioner, supra. The
license allowed WSA the privilege of conducting bingo games, a
fund raising activity; thus, the organization received an
economic benefit in return.
Based on our analysis, WSA's excess contributions qualify
for deduction as ordinary and necessary business expenses rather
than as charitable donations. Therefore, the excess
contributions are deductible under section 162(a). Further, the
excess contributions are directly connected to WSA's "instant
bingo" activities. We conclude that the payments made by WSA
from its bingo account to outside charities are deductible in
full under sections 162(a) and 512(a).
To reflect the foregoing and the concessions made by
respondent,
Decisions will be entered
under Rule 155.