# Petition for Writ of Certiorari — Rokke v. Commissioner

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1993
- **Citation:** 510 U.S. 1013

## Text

IN THE SUPREME
COURT OF THE UNITED STATES

OCTOBER TERM, 1993

DONALD LEIF ROKKE PETITIONER
vs.
COMMISSIONER OF INTERNAL REVENUE

RESPONDENT

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DONALD LEIF ROKKE

221 S.W. iIS3RD STREET

SUITE #1190

SEATTLE, WASHINGTON 98166

(206) 979-0723

—_——_——— eS SS Swe we eee ee as eo

i. Did the 9th Circuit U.S. Court of
Appeals Memorandum affirming the Tax
Court’s Order, but rejection of its
holding that Petitioner’s contribution
wee ea service violate:

. 1.1 Petitioner’s right to a
Jury Trial guaranteed by Amendment VII
of the U.S. Constitution and

1.2 Constitute an unlawful

decision based on the case facts, Tax
Code, case made lav, IRS Rules and
Regulations, as well as
1.3 Violate Petitioner’s

Amendment XIV guaranteed Rights to Due
Process and Equal Protection of the Laws?

2. Did the 9th Circuit U.S. Court of
Appeals’s Order denying Petitioner’s
Motion for Reconsideration violate
Petitioner’s Amendment XIV Rights to

Due Process end Equal Protection of

the Laws?

TABLE OF CONTENTS

PETITION FOR WRIT OF CERTIORARI TO THE

WASHINGTON STATE SUPREME COURT

GPEMEOMS BELOG 2 cc cccccccccccecccee 6
SUTGRSCTION cccccccceccceccececes 7

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED ....ccccccccces 7
STATEMENT OF THE CASE ..cccccccccece 8
REASON FOR GRANTING THE WRIT ..... 28
CONCLUSION ........ Co cccccccccccs - 64

INDEX TO APPENDICES

Appendix 1 I.R.S. 1986 & 1987

Deficiency Finding

Appendix 2 U.S. Tax Court Order

denying Petitioner’s Motion for

ii

Reconsideration of The Tax Court’s March
22, 1991 Denial of Peitioners Motion to
transer Petitioner’s case to the U.S.
District Court for Petitioner’s
counterclaimed Unjust Enrichment Jury

Trial. Dated April 3, 1991

Appendix 3 U.S. Tax Court Notice
of Service of Transcript, Dated June 11,
1991 with Tax Court Judges May 10, 1991
Bench Opinion and Oral Finding of Fact

attached.

Appendix 4 Sth Circuit Court of
Appeals July 23, 1993 Order stating case
shell be submitted on the briefs and
record, without oral argument, on
Wednesday, August 4, 1993 in Seattle,

Washington.

Appendix 5 9th Circuit Court of

Appeals July 29, 1993 Order Denying

iii

Petitioner’s Motion for Continuance to
enable submittal of recent citations of

related cases.

Appendix 6 Sth Circuit Court of
Appeals August 9, 1993 stamped and
unsigned MEMORANDUM Ruling finding

against Petitioner on all counts.

Appendix 7 Sth Circuit Court of
Appeals August 9, 1993 stamped and
unsigned Order Denying Petitioner’s
Motion for Remand to the district court
for jury trial, Denying Petitioner’s
Motion to reconsider the denial of a
continuance, and Denying Petitioner’s
Motion for leave to file additional
citations with the additional lcitations
memorandum to be rejected and not vileld

by the clerk.

Appendix 8 9th Circuit Court of

Appeals September 27, 1993 stampes and
unBigned Order Denying Petitioner’s
Petition fo Rehearing and Rejecting
Petitioner’s suggestion for rehearing en

banc.

Appendix 9 Amendment VII of the

United States Constitution

Appendix 10 Amendment XIV of the

United States Constitution

Appendix 11 Bleck’s Law Dictionary

definition of "Ordinary income."

Appendix 12 IRS PUBLICATION 561
DETERMINING THE VALUE OF DONATED

PROPERTY paregraph quote

Appendix 13 Jarre_v. Commissioner,

64 T.C. 183 (1975) precedent case

Appendix 14 Gose _v. Commiseioner,

59 T.C. 594 at page 596 precedent case

Appendix 15 Black's Law Dictionary

definition of "Spontaneous declaration.”

Appendix 16 Aerospace Engineering
April 1989 Edition article about the
Advanced Medium-Range Air-to-Air Missile

System

Appendix 17 1987 Aviation Week and
Space Technology article about the

Advanced Medium-Range Air-to-Air Missile

System

TABLE OF AUTHORITIES CITED Page No.
CASES

Jarre_v. Commissioner, 43, 46,
64 T.C. 183 (1975) 49 & 51

Vi

Goss _v. Commissioner, 43, 48,

59 T.C. 594 at page 596 49

(1973)

STATUTES

United Stetes Constitution, 3, 8, 12

Seventh Amendment 314, iS.
24, 36

United States Constitution, 6, 8 18

Fourteenth Amendment i939, 37

Title 28 United States Code, 7

Section 2403(a)

Internal

Section

Section

Section

Section

Revenue Code,

170

1221(3)

1346

6512(a)

42

44

14

14

Section 6653(a)

OTHER LAWS

IRS Publication 544

IRS Publication 561

COMMON LAW

Unjust Enrichment

22, v7, 38

62, 63

16

242, 33, 42
2, 3, 12,

Black’s Law Dictionary Definitions:

Ordinary Income

Spontaneous Declaration

Clearly Erroneous

iS, 42, 43
S50, S9
32

36

A a a a Novensger (993 Seog: BS

DONALD LELIF ROKKE,
Pro Se, Attorney

for Petitioner

Footnote: 1. If this Court elects not
to addrese the issues presented in this
writ at the present time, it is
requested that the writ issue and that
the matter be remanded to the U.S.
Circuit Court for the Ninth Circuit for
redetermination in light of the
arguments contained in the REASONS FOR
GRANTING THE WRIT section of this

Petition.

ete inaeianeciieteimetel

IN THE SUPREME

COURT OF THE UNITED STATES

CCTOBER TERM, 1993

DONALD LEIF ROKKE - PETITIONER
vs.
COMMISSIONER OF INTERNAL REVENUE -
RESPONDENT
PETITON FOR WRIT OF CERTIORARI
TO THE UNITED STATES CQURT OF APPEALS
FOR THE NINTH CIRCUIT
PETITION FOR WRIT OF CERTIORARI

APPENDIX

SL LS SS A Se ES GAS AD AOR NN GD SS a An rh Sl en, eles. seni. a. ah Jains ue aa ‘ills lb ain Meas Gane mek ss die Ge

APPENDIX

TABLE OF CONTENT

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Se 6s ne O40 4860 eee e eee 92
R60 48-055 50 64 e eee 93
as setae tekuseaveaniawdeseees 94

ma

4
F

APPENDIX
PAGE 1 OF 7 ih

Internal Revenue Service Department of

the Treasury

Date: FEB. @5 1990 In Reply Refer to:
AP:SEA:90-D:JLS:CMR
Person to Contact:
JEFFERY I. SHERRILL
Cont. Phone Number:
(206) 442-2382

TIN: 522-200-0564

Tax Year Deficiency Penalty Section
Ended: 6653(a) 6659
12/31/86 $4621.22 $194.00 $1166.00
12/31/87 $4654. 00 $197.00 $1180. 0@

For returns required to be filed after
December 31, 1981, if the penalty under
Section 6653(a) applies, the penalty
under Section 6653(a)(1)(B) will also

apply in an amount to be determined.

APPENDIX 1
PAGE 2 OF 7 2

Dear Taxpayer:

We have determined that there is a
deficiency (increase) in your income tax
se shown above. This letter is a NOTICE
QF DEFICIENCY sent to you as required by
law. The enclosed statement shows how
we figured the deficiency.

If you want to contest ths deficiency
in court before making any payment, you
have 9@ days from the above mailing
date of this letter (159 days if
addressed tc you outside of the United
States) to file a petition with the
United States Tax Court for a
redetermination of the deficiency. The
petition should be filed with the United
States Tax Court, 49090 Second Street NW,
Washington, D.C. 20217, and the copy of
this letter should be attached to the
petition. The time in which you must

file a petition with the court (990 or

APPENDIX 1
PAGE 3 OF 7 4

15@ days as the case may be) is fixed by
law and the Court cannot consider your
case if your petition is filed late. If
this letter is addressed to both a
husband and wife, and both want to
petition the Tax Court, both must sign
the petition or each must file a
separate petition.

If you dispute not more than $190, 002
for any one year, a Simplified procedure
is provided by the Tax Court for small
tax cases. You can get information
about this Pprocesdure, as well as a
petition form you can use, by writing
the Clerk of the United States Tax Court
at 42@ Second Street NW, Washington,

D.C. 20217. You should do this promptly
if you intend to file a petition with
the Tax Court.

If you decide not to file a petition
with the Tax Court, we would appreciate

it if you would sign and return the

APPENDIX 1
PAGE 4 OF 7 4

enclosed waiver form. This will permit
us to assess the deficiency quickly and
will limit the accumulation of interest.
The enclosed envelope is for your
convenience. If you decide not to sign
and return the waiver and you do not
timely petition the Tax Court, we will —
assess and bill you for the deficiency
after 90 days from the above mailing
date of this letter (150 days if this
letter is adddressed to you outside the
United States).

If you have any questions, please
contact the person whose name and
telephone number are shown above.

Sincerely yours,

Fred T. Goldberg, Jr.
Commissioner

By

MARVIN WEISBART

Associate Chief, ;

APPENDIX 1
PAGE 5 OF 7

Appeals Office

Letter 893(RO) (Rev. 9-84)

Enclosures

Seattle Appeals Office
915 Second Avenue, Room 2790,
M/S 682

Seattle, Washington 98174

APPENDIX 1
PAGE 6 OF 7

FORM 886-A EXPLANATION OF ITEMS
Name of Taxpayer YEAR/PERIOD ENDED

Billie G. & Donald Rokke 1986 1987

A. Medical/Dental

We MOVE wzctiveceses limitations - see

exhibits 1A & 1B.

B. Contributions

We have disallowed contributions in
the amounts of $20,356 & $22,408 for the
tax years 1986 & 1987 respectively as
it has not been established that the
contributions were made to a qualifing
organizatin and you may not deduct the
value of your time or services donated
to charitable causes. We have allowed
amounts verified by you in the amounts

of $1,737.75 & $693.00 in the tax years

1986 & 1987 respectively.

APPENDIX }
PAGE 7 OF 7

You have also been allowed $3, 421.92
for your contribution of a study to the
United States Government. As this is
ordinary income Property you must reduct
the fair market value of the property
given by the gain you would hve received
if you had sold it. This contribution
Claimed of $250,000 for 1986 (with
appropriate carryovers to 1987 and
beyond) has also been dissallowed as you

haven’t shown a valid/qualified

appraisal for this contribution.

APPENDIX 2
PAGE 1 OF 3

UNITED STATES TAX COURT

WASHINGTON, D.C. 20217

DONALD LEIF ROKKE, )
Petitioner » Docket No.
») 6862-90
Vv. )

COMMISSIONER OF INTERNAL )

REVENUE, Respondent )

On March 20, 1991, petitioner filed a
motion to transfer his Tax Court case to
the U.S. District Court. This Court
denied petitioner’s motion on March 22,
1991. On April 2, 1991, petitioner
filed a Motion for Reconsideration of
this denial on the basis that his
constitutionally guaranteed right to a

i

iene

APPENDIX 2
PAGE 2 OF 2

trial by jury has been violated.

Clearly, there is no merit to
petitioner’s request for a jury trial in
the Tax Court. See Wickwire vy. Reinecke,

275 U.S. 101, 105 (1927); Phillips v

Commissioner, 2823 U.S. 589, 599 n.9

(1931); Dorl_v. Commissioner, 57 T.C.
720, 721-722 (1972), eaff’d. 507 F.2d 406
(2nd Cir. 1974). Moreover, once a
petitioner files a Tax Court petition,
the Tax Court has exclusive jurisdiction
and no other court involving the
determination of tax due for the year
covered by that petiton may be brought
by petitioner. Sec. 6512(a),I.R.C.

Thus, section 6512(a), I.R.C., operates
86 a limitation on the general
Jurisdictional grant of section 1346,
I.R.C., which grants the District Court

Jurisdiction over suits to recover

texes. Premises considered, it is

i tt—i(‘“CO™O™SCSCSC—S

APPENDIX 2

PAGE 3 OF a
1@

hereby

ORDERED that petitioner’s Motion for

Reconsideration is denied.

Joel Gerber

Judge

Dated: Washington, D.C.

April 9, 1991

APPENDIX 3
PAGE 1 OF 20 11

UNITED STATES TAX COURT
WASHINGTON, D.C. 20217

June 10, 1991

DONALD LEIF ROKKE, )
Petitioner ) Docket No.
) 6862-92
Vv. )
)
COMMISSIONER OF INTERNAL )

REVENUE, Respondent )

Notice of Service of Transcript

Pursuant to Rule 152(b), Rules of
Practice and Procedure of this Court,
there is transmitted herewith to
petitioner and to the respondent a copy
of the pages of the transcript of the
trial of the above case before Judge
Joel Gerber, at Seattlle, Washington, on

May 10, 1991, containing his oral

i

APPENDIX 3

PAGE 2 OF 20 12

findings of fact and opinion rendered at

the conclusion of the trial.

In accordance with the oral findings
of fact and opinion, decision will be

entered under Rule 155.

(Order signed by:)
Charles S. Casazza

Clerk of the Court

Served Jun 11 1991

APPENDIX 3

PAGE 3 OF 20 13

Bench Opinion by Judge Joel Gerber

Docket No. 6862-990 May 190, 1991

THE COURT: The Court has decided to
render an oral opinion in this case, and
the following represents the Court’s

Oral findings of fact and opinion.

This bench opinion is made pursuant to
the authority granted in section 7459(b)
of the Internal Revenue Code of 1986, as
amended, and in effect for the years
under consideration, and under Rule 152
of this Court’s Rules of Practice and

Procedure.

Respondent in a statutory notice of
deficiency determined deficiencies in
petitioner’s 1986 and 1987 income tax in
the amounts of $4,621 and $4,654,
respectively. Respondent also

determined additions to tax under

APPENDIX 3

PAGE 4 OF 20
14

section 6653(a)(1)(A) in the amounts of
$194 and $197 for 1986 and 1987,
respectively, plus fifty percent ci the
interest due on the redetermined
deficiency under section 6653(a)(1)(B).
Respondent also determined additions to
tax under section 6659 in the amounts of
$1,166 and $1,180 for the 1986 and 1987

taxable years, respectively.

After consideration concessions by
petitioner, there remains in controversy
the question of whether petitioner is
entitled to any amount in connection
with his claimed contributions of
studies or reports he has authored and
supplied to the federal government, and
whether petitioner is liable for

additions to tax.

Petitiioner’s legal residence was

Seattle, Washington at the time his

APPENDIX 3
PAGE 5 OF 20 15

petition in this case was filed.

Petitioner authored a study or report
he has denominated, I quote, "Collection
of data macroeconomics study
manuscript(s),"” end quote. The document is
&@ compendium of materials from the
Public domain that petitioner has
collected over a twenty-year period
concerning national economic conditions
and problems. The compendium is tied
together by a five-page summary or
composite which describes impending
economic crisis and certain solutions.
During 1986 petitioner transmitted
copies of the report to various
highly-placed federal government
officials, including the President, the
Director of the CIA, and the Treasury
Secretary. The report was unsolicited
by the intended recipients. Petitioner

describes the report as one which, I

APPENDIX 3

PAGE 6 OF 20 16

quote, "(PljJresented to the nation’s
executives the facts that prove that the
nations’s financial institutions were in
debt to such a degree that failure - a
preponderance of the industry,
Organizations, entities was unavoidable. "
Petitioner also transmitted another
report or study to the federal

government officials during 1987.

Petitioner ccntended that the study
contributed in 1986 had a cost basis of
$250,208, and that the report
contributed in 1987 had a cost in excess
of $200, 900. Petitioner claimed the
maximum contribution deduction
permissible under section 170, or fifty
percent, against his reported income for
1986 and 1987. Respondent examined
petitioner’s 1986 and 1987 income tax
returns and disallowed all of the

claimed contributions, with the

|

APPENDIX 3

PAGE 7 OF 22
17

exception of his out-of-pocket expenses
in the amount of $3,421.92 for the year
1986. No amount was allowed or agreed

to by respondent for 1987.

Petitioner bears the burden of showing
respondent’s determination to be in
error. Welch v. Helvering, 292 U.S.

111 (1933); Rule 142(a), Tax Court Rules

of Practice and Procedure.

Respondent does not dispute that
petitioner authored the reports and
transmitted them to the federal
government. Instead, respondent argues
that—section 17@(e) provides that in the
case of "ordinary income property” the
amount of charitable contribution of
property is to be reduced by the amount
Of gain which would not have been long-

term capital gain if the property

contributed had been sold by the

ee

APPENDIX 3

PAGE 8 OF 20 18

taxpayer at its fair market value.

Under section 1.17@A-4(b)(1), Income Tax
Regulations, ordinary income property
includes manuscript, letter, or
memorandum prepared by the doner. If we
should decide thatthe reports were
capital gains property in petitioner’s
hands, then respondent argues that
petitioner has not established the fair
market value of the reports and that the
claimed contributions hould be
disallowed on that basis. Respondent
also points out that section 1221
provides that the term "capital asset”
does not include a copyright, literary,

musical, artistic composition, letter,

memorandum, or similar property.

Petitioner contends that if
respondent’s interpretation of the

statutes and regulations is correct,

that the United States Government has

APPENDIX 3

PAGE 9 OF 2@ 19

been unjustly enriched, and that he
seeks a counterclaim or offset for the
difference between the amount agreed to
by respondent (the out-of-pocket
expenses) and the alleged $252,000 fair

market value.

We find respondent’s position to be
correct and hold that petitioner is
limited to a deduction of $3,421.92 for
his outof-pocket expenses in the 1986

taxable year.

It is further held that petitioner is
not entitled to any amount of the
claimed contribution for the 1987

taxable year.

Section 170, Internal Revenue Code of
1986, eallows as ea deduction any

Charitable contribution. Under

section 170(c), a "charitable

ee

APPENDIX 3
PAGE 1@ OF 20 70

contribution” is defined to bea
contribution or gift to or for the use
of certain specified classes of
organzizations. The United States of
America is one such recipient to which
contributions within the meaning of
section 170 may be made. See section

17O(c)(1).

—————

Section 170(e) concerns contributions of
certain types of property and limits
contributions to the fair market value
of the property which is a capital asset
in the hands of the donor or to,
essentially, the out-of-pocket
expenditures if the property is ordinary
income property in the hands of the
donor. In the setting of this case, vwe
must essentially determine whether the
contribution was a gift of services or
of property by petitioner. See Goss v.

Commissioner, 59 T.C. 594 at page 596

eee ee

APPENDIX 3

=
PAGE 11 OF 20 24

(1973).

By way of analogy, petitioner contends
that his report is like a personal
letter of a famous person which has
value because of its historical
importance rather than because of the
euthor’s services or business activity.
Although petitioner admits that he is
not ea famous person, he believes that
hig report played a Significant role in
Our nation’s history and is similar to
@ letter written by a famous person.
Petitioner also argues that he is an
engineer and not an economist, and that
his report concerns economic principles.
Petitioner argues that the report is,
therefore, not a rendering of services
for which he would have received
ordinary income within the meaning of
secton 179. In support of his position,

petitioner cites two cases and a revenue

APPENDIX 3

PAGE 12 OF 20 ao

ruling, as follows: Goss v.

Commissioner, supra; Jarre v.

Commissioner, 64 T.C., page 183 (1975);

and Revenue Ruling 84-1, to be found at

84-1 CB, page 39.

The Goss case is the most closely
aligned to the facts of this case. In
Goss, the taxpayer wrote two essays

related to the interests of the National

Council of Negro Women and gifted them |
to that organization. In holding that
the gift was one of property and not of
services, this Court relied upon the
case of Holmes, v. Commissioner at 57
T.C., page 43@ (1971). In Holmes, the
taxpayer had donated artistic property
(films) to charitable organizations.
The focus there was upon the fact that
the films were separate property, even
though they had been created by the

taxpayer’s services. The same basic

APPENDIX 3
PAGE 13 OF 20

23

analysis was employed in the Goss case.

Here, petitioner accumulated related
materials which were in the public
domain. At some point in time,
apparently near the contribution of the
materials, petitioner decided that the
materials, along with his summary and
suggestions (contained in the five-page
letter), would be helpful to federal
government officials to avert financial

crises.

We do not consider petitoner’s report
to be separate property or artistic
property in the same manner as the
property referred to in the cases that
he cited. Instead, petitioner’s
contribution here is an offer of advice
or @ suggestion to his government,
essentially in letter form, and

Supported by a compendium of materials

APPENDIX 3

- PAGE 14 OF 20 74

that he had accumulated over a period of
time. Even though petitoner may not see
himself as one who could professionally
hold himself out or one who sells his
services as an economic professional, we
find that he was supplying his services
to the government. Respondent has
allowed petitionere his our-of-pocket
expenses cncerning the report, and
petitoner is not entitled to deduct an
additinal deduction for his 1986 or 1987

taxable years.

Due to our holding, there is no need to

decide the value, if any, of petitioner’s
report. Petitioner, in claiming a
deduction based on value in excess of
$200,000, used a comparative analysis.

He suggests that the federal government
has peid substantiaely larger sums for
studies and reports concerning

significantly less important matters

APPENDIX 2
PAGE 15 OF 20 25

that tne collapse of the national
economy. Although petitioner’s point is
well taken, the government did not
contract with petitioner to provide the
advice. And the report does not have
inherent value as property, but it is
petitioner’s idea or conceptual offering
that may have had the value. The value
of the concept, if any, was in the
petitioner’s rendering of the service

by communicating the idea to the
government. Petitioner is to be
commended for his attempt to assist his
government at a time when he sensed
impending economic crises, but Congress
did not provide for respondent in this

type of situation.

At trial, petitioner sought to make a
counterclaim against the government.
Petitioner argued, if we decide that he

was not entitled to a contribution for

APPENDIX 3

PAGE 16 OF 20
26

the amount he claimed, then the
government received the benefits and
oved him for the idea. Concerning
petitioner’s counterclaim, we need not
address that issue because our
jurisdiction is statutorily limited

to those matters enumerated in Title 26,
United States Code, and does not include
claims against the United States of
America being pursued under Title 28,
United States Code, or any other
statutorily-authorized claims against
the sovereign. See Sections 7441 and
7442, Internal Revenue Code of 1986, and
the discussion in Oppenheimer v.
Commissioner, T.C. Memo 1986-537, and
Lewicki v. Commissioner, T.C. Memo 1974-
86. Accordingly, we are without
authority or jurisdiction to consider or

grant petitioner’s counterclaim.

We note that we have also denied

LT

APPENDIX 3
PAGE 17 OF 20 >7

petitioner’s request for a jury trial
and/or removal to the United States
District Court by a pretrial order.

See Masat v. Commissioner, 784 F.2d 573

at page 577 (Sth Cir., 1986).

Section 6653(a)(1)(A) and section
6653(a)(1)(B) provide for the addition to
tax if any part of the underpayment is
due to negligence or disregard of the
rules and regulations. Negligence is a
lack of due care or failure to do whet a
reasonable and ordinary prudent person
would do under the circumstances. Neely
v. Commissioner, 85 T.C. 934 at page 947

(1985).

Respondent’s determination of negligence
is presumed to be correct, and the
teaxpeyer hes the burden of proving the

determination to be erroneous. Lumen v.

Commissioner, 79 T.C. 846 at peages 8620

APPENDIX 3

PAGE 18 OF 20
28

and 861 (1982); and Rule 142(a) of this

Court’s Rules of Practice and Procedure.

Petitioner had become knowledgeable
about claiming contributions of authored
materials. He was audited, and
respondent disallowed a similar
contribution in connection with an audit
of his 1973 taxable year. In spite of
the audit and disallowance of the 1973
cntribution, petitioner has again

claimed a similar deduction in 1986 and

1987. Petitioner has not shown a change

in the statutes or case lav.

Although he attempted to characterize
the subject of his contribution as a
contribution of property rather than
services, we find that the 1986 report
was not property and, accordingly, not

subject to capital gains.

—— |

APPENDIX 3
PAGE 19 OF 20 29

We further find petitioner liable for
the additions to tax under sections
6653(a)(1)(A) and (B) for his 1986 and

1987 taxable years.

Finally, respondent detereined that
petitioner was liable for an addition to
tax under section 6659, which relates to
underpayment of tax attributable to a
valuation overstatement. In the Setting
of this case, we did not disallow
petitioner’s contibution deduction in
connection with or consider the question
Of valuation. Because our holding is
not based upon an overvaluation under
section 6659, that section is not
applicable. See McCrary v.

Commissioner, 92 T.C., Page 827 (1989);
and Todd v. Commissioner, 862 F.2d, page

542 (Sth Cir., 1988).

And that is the conclusion of this

30

Appellate Courts.

Introduction:

In this section we will be dealing
with a number of Internal Revenue Code
Statutes, IRS Rules end Regulations, IRS
Publications, Amendments of the United
States Constitution and the Rights they
Guereantee, Common Lav, Case none Ley,
Federel Rules of Civil Appellate
Procedure, eppropriate dictionary legal
definitions, and the United Stetes Tax
Court Rules of Prectice end Procedure
requirements es they epply to the 9th

Circuit Court of Appeels, August 6, 1993

a

31
MEMORANDUM Ruling which was unsigned by
the Judges plus unsigned August 9 as
well as September 27, 1993 9th Circuit
Court Orders.

I. First it should be stated that
justice has not been served by the IRS
during the processing of this case. This
ia true with regard to the IRS because
there were many errors of fact, errors
of law, intentional distortions, and
malicious attempts to discredit and/or
diminish Petitioner’s case which were
included in the February 5, 1990 IRS
final Tax Deficiency Finding. See
Appendix 1 for a copy of that document.
The above identified errors and misdeeds
are identifiable by comparing the
content of Appendix 1 with the above
STATEMENT OF THE CASE.

II. Second it should be stated that
justice hes not been served by the Tex

Court during the processing of this

32

case. This is true with regard to the
Tax Court because there were many errors
of fact, errors of law, intentional
distortions, and malicious attempts to
discredit and/or diminish Petitioner’s
case which were included in the May 10,
1991 Tax Court Bench Opinion and Oral
Finding of Facts. See Appendix 3 for a
copy of that document. The above
identified errors and misdeeds are
identifiable by comparing the content of
Appendix 3 with the above STATEMENT OF
THE CASE.

III. Third it should be pointed out
that the Justice Department Defaulted on
their case by edmitting, via devault, a
preponderance of Petitioner’s 9th
Circuit Court of Appeals Brief. This
default came about by the Justice
Depertment’s failure to deny or rebutt
the content of major elements of

Petitioner’s 9th Circuit Court of

a

oe So. 9i-70722

Vv. ) Tax Ct. No.
) 6862-92
COMMISSIONER OF INTERNAL )
REVENUE ) ORDER
Respondent -Appellee )
Before: WRIGHT, BEEZER, AND HALL,

Circuit Judges.

The Appellant filed with the deputy
clerk in Seattle on August 4, 1993, four
documents.

IT IS ORDERED that:

the motion for remand to the district

APPENDIX 7
PAGE 2 OF 2 49

court for jury trial is DENIED;

the motion to reconsider the denial of
a continuance is DENIED;

the motion for leave to file additional
Citations is DENIED and the additional
Citations memorandum will be rejected

and not filed by the Clerk.

THIS DOCUMENT WAS SERVED ON PETITIONER

UNSIGNED

Stamped August 9, 1993

APPENDIX &

5
PAGE 1 OF 2 52

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DONALD LEIF ROKKE, )
Petitioner-Appellant, ) No. 91-70722
) Tax Gt. He.

Vv. ) 6862-90

COMMISSIONER OF INTERNAL ) ORDER
REVENUE )

Respondent -Appellee )

Before: WRIGHT, BEEZER, AND HALL,

Circuit Judges

The panel has voted to deny the petition
for rehearing, and Judges Beezer and
Hall have voted to reject the suggestion

for a rehearing en banc.

APPENDIX 8
PAGE 2 OF 2

The full court has been advised of

the suggestion for rehearing en banc and
no active judge has requested a vote on
whether to rehear the mnatter en banc.
Fed. R. App. P. 35(b).

The petition for rehearing is DENIED
and the suggestion for a rehearing

enbanc is REJECTED.

THIS DOCUMENT WAS SERVED ON PETITIONER

UNSIGNED

Stamped Sep 27 1993

APPENDIX 9
PAGE 1 OF 1

UNITED STATES CONSTITUTION

AMENDMENT VII (1791)

In Suits at common law, where the
value in controversy shall exceed twenty
dollars, the right to trial by jury shall
be preserved, and no act tried by jury,
shall be otherwise re-examined in any
Court of the United States, than

according to the rules of common lav.

APPENDIX 10
PAGE 1 OF 1 c

UNITED STATES CONSTITUTION

AMENDMENT XIV (1868)

Section 1. All persons born or
naturalized in the United States, and
subject to the jurisdiction thereof, are
citizens of the United States and of the
State wherein they reside. No State
shall make or enforce any law which
shall abridge the privileges or
immunities of citizens of the United
States; nor shall any State deprive any
person of life, liberty, or property,
without due process of law; nor deny to
any person within its jurisdiction the

equal protection of the laws.

APPENDIX 11
PAGE 1 OF i

BLACK’S LAW DICTIONARY

Definition:

"Ordinary income. For income tax
purposes reportable income not
quelifying as capital gains. Term used
to describe income taxed at ordinary
rates in contrast to income texed at
the more advantageous rates of capital
gains. Term embraces income from
reguler sources such as weges,
commissions, interest, dividends and the

like.

Where "regular" is defined as:

*"Reguler. Conformable to law.
Steady or uniform in course,
practice, or occurrrence; not subject to

unexplained or irrational variations.

Usuel, customary or general. ..."

APPENDIX 12
PAGE 1 OF 1

ul
un

IRS PUBLICATION S61 DETERMINING THE

VALUE OF DONATED PROPERTY

*"Manscripts, autographs, diaries,
anc similer items that are handwritten,
Or at ieast signed by famous people,
ofter are in demand and are valuable.
The writings of unknowns also may be of
value if they are of unusual historical
or literary importance. Determining the
value of such material is difficult.
There may be a great difference in value
between two diaries that were kept by a
famous person--one kept furing childhood
and the other during an important period
in his or her life. The appraiser
determines a value in these cases by
applying knowledge and judgment to

factors such as comparable sales and

conditions.”

APPENDIX 13

PAGE 1} OF 23
36

MAURICE JARRE AND MARY LOUISE JARRE,
PETITIONERS V. COMMISSIONER OF INTERNAL

REVENUE, RESPONDENT.

Docket No. 6546-73. Filed May 7, 1975

Petitioner Maurice Jarre contributed
certain of his original music
manuscripts and other related materials,
such as the score of "Dr. Zhivago,” to
the University of Southern California in
1967 and 1968.- Held, the fair market
value of said gifts determined.

Eli Blumenfeld, for the petitioner.
Stephen W. Simpson and Jonathan A. Brod,
for the respondent.

STERRETT, Judge: The respondent
determined deficiencies of $28,116 and

$34,028 in the Federal income taxes of

petitioners for the calendar years 1967

APPENDIX 13

PAGE 2 OF 23 57

and 1968, respectively. The sole issue
presented requires our determination of
the fair market value of certain
Original music manuscripts and related
material contributed by petitioner
Maurice Jarre to the University of
Southern California in 1967 and 1968 for
purposes of computing the amount of
deductions for charitable contributions
to which petitioners are entitled under

section 170, I.R.C..

FINDING OF FACT

Some of the facts have been
stipulated and are so found. The
stipulation of facts, together with the
exhibits attached thereto, are
incorporated herein by this reference.

Petitioners are husband and wife

whose legal residence at the time of

filing the petition was in Beverly

APPENDIX 13
PAGE 3 OF 23 528

Hills, Calif. They filed joint Federal
income tax returns for the calendar
years 1967 and 1968 with the District
Director of Internal Revenue at Los

Angeles, Calif.

Petitioner Maurice Jarre ‘(hereinafter

Jarre) is 8 music composer and conductor
of international reputation. Jarre has
been a composer and conductor for some
25 to 28 years. He began his music
cereer in Lyons, France, and then
studied in Paris at the National
Conservatory Music. Jarre, along with
Pierre boulez (currently the music
director of the New York Philharmonic
Orchestra), then became the music
edviser to the newly formed Jean-Louis
Barrault Theater Co. in France where he
remained for 4 years. Jarre
subsequently became music director and
conductor for the French National

Theatre in 1951, positions he held for

APPENDIX 13
PAGE 4 OF 23 59

12 years. During this period petitioner
was responsible for the music budget,
composed the music for all

plays, including "Macbeth," "Oedipus, ”
and "The Hairy Ape,” and conducted the
orchestra for all plays and concerts.

He also composed music for French films,
radio broadcasts, a ballet, and
television program.

In 1964 Jarre moved to and became a
permanent resident of the United States.
He has since composed music for
approximately SO American films. Some
of Jarre’s scores for American films
include "Lawrence of Arabia," "Topaz,”
"Ryan’s Daughter,” "Dr. Zhivago,” "Is
Paris Burning?," "Grand Prix,” "The
Longest Day,” and "Night of the
Generals.” Jarre generally prepares all
elements, including arrangements and
orchestration, of the film scores he

composes and sometimes conducts the

APPENDIX 13

PAGE S OF 23 60

music for the sound track. Jarre has a
Classical music background and has
written symphonic euaie, ballet and
opera music, and also electronnic music
called musique concrete. He has
conducted well-known symphony orchestras
in a number of foreign nations. His
most publicized success, however, has
come in the field of popular culture
music and, more particularly, in music
for film. Jarre is considered by his
peers to be one of the top 10 composers
of music for film in the world and he is
one of the most sought after composers
in the film industry.

Jarre is a member of the American
Society of Composers, Authors and
Publishers (ASCAP) as a publisher. He
is also a member in the highest rank of
the Society of Authors, Composers, and

Publishers (SACEM) as a composer. An

individual is not permitted to be a

APPENDIX 13

PAGE 6 OF 23 &)

member of both organizations in the same
category. Jarre has served on a number
of committees and advisory groups

dealing with music both in France and in

the United States. There is a large
number of books and magazines containing
biographical material about Jarre and
his career in music of which a sampling
of some 53 (American and foreign) was
placed in evidence in this proceeding.
In addition, a good deal of his music,
both American and foreign, has been
recorded.

Jarre has won two Academy Awards
(for the scores for "Lawrence of Arabia"
and "Dr. Zhivago"), a Golden Globe
avard, and has received three other
Academy Award nominations. He has also
received a number of awards of
compsrable importance in France (such as
the chevalier des Arts et Lettres),

Germany, England, and Italy.

APPENDIX 13

PAGE 7 OF 23 62

In his capacity as a composer,
Jarre has created numerous original
works, some of which have been
contributed to the University of
Southern California and the University
of Wyoming after solicitation of his
material by those schools. In response
to requests, in 1967 and 1968 Jarre
contributed certain original music
manuscripts and other related material
to the University of Southern
California. The following property
rights were conveyed as part of the 1967
and 1968 gifts: all copyrights; rights
of publication in book form; rights of
serialization; magazine and newspaper
rights; reprint rights; and book club
rights or dramaatization rights.

The 1967 and 1968 gifts include
the music manuscripts and related
material to some 14 of Jarre’s American

films, 10 French films, 10 plays, 2

APPENDIX 13

PAGE 8 OF 23 -

ballets, and a number of French radio
and television productions and consist
of over 4,000 pages. The material
consists mainly of Jarre’s original and
generally complete workings (as opposed
to finished) manuscripts of musical
scores and sketches (some several
hundred pages long) writtten in his own
hand, some signed on a number of

pages, and with annotations. Music
notes, click track timing sheets, and
cue sheets, generally annotated and
sometimes completely in Jarres hand, and
some photocopies and typescripts of
scores are also included. Among the
contributed scores for American films
were those from "Grand Prix,” "Dr.
Zhivago” (the music of which sold some
14 million tapes and records and some
1,500,000 lead sheets), "Nights of the
Generals,” "Behold a Pale Horse," "Is

Paris Burning?" and "Gambit." The

APPENDIX 13

PAGE 9 OF 23 64

condition of the inmates material was
very good.

Prior to and including the years
in issue none of Jarre’s original
menuscripts or copies thereof had come
oo: the market. Except for a few one page
fair copies of music from "Ryan’s
Daughter," "Dr. Zhivago," and "Lawrence
of Arabia" which were sold to dealers for
$50 to $75 in 1974 and three one-page

fair copies of music from "Dr. Zhivago, "

two of which were sold to collectors for

$300 and $325, respectively, in 1974 and

one for $75 in 1972 none of Jarre’s work

has come on the market. A fair copy is a
copy in the composer’s own handwriting.

. During the years in issue, Jarre
retained one Milton Luboviski
(hereinafter Luboviski), the proprietor
of Larry Edmons Book Shop, to eppraise
his donated material. Luboviski, who

deals in cinema and theater materiel,

APPENDIX 13
PAGE 10 OF 23 65

appraised the donated material at the
time of contributions. His
determinations of the fair market value
of the donated material for 1967 and
1968 were $54,200 and $61, 900. In 1971,
Jarre retained one Charles Sachs,
proprietor of the Scriptorium, to
appraise his 1967 and 1968 gifts.
Sachs’ appraisal found the fair market
values, as of the dates of
contribution, of Jarre’s materials
contributed in 1967 and 1968 to be
$61,996 and $35,918, respectively.

. Respondent retained one Doris
Harris, the proprietress of Doris
Harris Autographs, to value the
contributed material. In 1970 she
appraised the 1967 and 1968 gifts at
$5,875 and $2,775, respectively, as of
the dates of contribution. On learning
that some of the handwriting she

attributed to a coopyist was actually

APPENDIX 13
PAGE 11 OF 23 66

that of Jarre and upon a number of the
donated manuscripts becoming availablle
for her inspection, which were not at
the University of Southern California at
the time of her original appraisals,
Harris reappraised the 1967 and 1968
material in issue, as of the dates of
contribution, at $7,615 and $4,915,
respectively.

In their 1967 and 1968 income tax
returns, petitioners claimed deductions
of 354,200 anc $61,900, respectively,
for the contributions in question made
by Jarre. In his notice of deficiency
respondent disallowed the claimed
deductions upon his determination that
petitioners did not own the donated
material, a point now conceded by
respondent. In the notice of deficiency
respondent alternatively determiined
that, in the event ownership of the

donated material is established, the

APPENDIX 13
PAGE 12 OF 23 67

deductions for the years 1967 and 1968
would be limited by the fair market
values thereof to $4,875 and $2,775,
respectively. Respondent now has
conceded that petitioners are entitled
to deductions of $7,615 for 1967 and
$4,915 for 1968, rather than the amounts
stated in the notice of deficiency, but
contends that no larger deductions are

allowable.

OPINION

The sole issue for decision relates
to the amount of the deductions for
purposes of section 170 to which
petitioners are entitled for the
contributions of original music
manuscripts and other relateld material
to the University of Southern California
in 1967 and 1968. There being no issue

as to the other requirements of section

APPENDIX 13

PAGE 13 OF 23 68

170, the only question presented is the
proper amount of the deductions, or the
fair market value of the contributed
property.

With respect to contributions of
property, section 1.170-1(c)(1) of the

Income Tex Regs. provided in part:

(c)*eee(1) Generel rules. If a
contribution is made in property other
than money, the amount of the deducton
is determined by the feir market vaiue
of the property at the time of the
contribution. The feir market value is
the price at which the property would
change hands between eae willing buyer and
e villing seller, neither being under
any compulsion to buy or sell and both
having reasonable knoweledge of relevent

facts. «ee

Petitioners contend that the fair

APPENDIX 13
PAGE 14 OF 23 69

market values ofthe 1967 and 1968 gifts
were $54,200 and $61, 900, respectively,
which amounts they deducted on their
appropriate tax returns. It is
respondent’s position that the fair
market values of the donated prpoerty
were $7,615 for 1967 end $4,915 for
1968.

The question of fair market value is
one of fact which must be resolved from
consideration of all the relevant
evidence in the record. Philip Keplen,
43 T.C. 663, 665 (1965). Both parties
produced voluminous testimony, which ve
will not recount, of experts and others
dealing in or faemilier with property of
the type in question in addition to a
number of exhibits including the
eppreisel reports of the expert
vitnesses. In the interest of brevity,

ve have summarized only the highlights

of such evidence in our Findings of

APPENDIX 13

PAGE 15 OF 23 70

Fact.

In resolving the issue of the fair
market value of the gifts of music
manuscripts and related material, we
believe the following factors are
ancluded among those elements which we
must, and have, considered in
determination of the question at hand:
the composers standing in his field and
popularity of his works in general; the
critical accleim and populer appeal of
the particular works contributed; the
relative place and importance of the
contributed works in the composers
career; the condition and content of the
contributed works; whether the

contributed works are originals, feir

copies, or photocopies, are written in
the composer’s own hand, are signed, or
ere in ink, pencil or typed; the length

of the individuaell contributed works and

the sizes of the pages containing them;

APPENDIX 13

PAGE 16 OF 23 71

whether the mental processes of the
composer are shown (i.e., working versus
souvenir or finished manuscripts),
including annotations; the demand in the
marketplace for the type of vorks
contributed and for the particular works
contributed; the associative character
of the contributed works (such as the
film, its actors and actresses, its
director, or its subject); the

quantity, or conversely the rarity, of
the contributed material (including ©
whether the composer is dead or alive);
and the length of time necessary to sell
the contributed works.

In weighing the testimony and
appraisals of the expert witnesses in
this case, we have considered as
important their demonstrated
qualification to form an opinion, their
familiarity with the background and

relative place of Jarre in his field,

APPENDIX 13
PAGE 17 OF 23 72

their choices of comparable sales, their
familiarity and contact with the
potential market for the contributed
material, and their knowledge of the
material. We also have considered the
expert witnesses’ relative expertise as
judged and observed by us, the time
spent on and thoroughness of their
appraisals, and their knowledge of the
particular field both before and after
research. See Keystone Wood Products
Co., 19 8.T.A. 4436. 2421 -2ig2 (i920).
affd. 66 F.2d 258 (2nd Cir. 1933).

In this respect, we note that the
testimony of all three expert witnesses
had instances of inconsistent, vague,
and conclusionary statements. We think
it important that petitioner’s experts,
especially Luboviski, deal daily in
cinema memorabelia, while respondent’s

expert does not. Clearly, this does not

make respondent’s expert incapable of

APPENDIX 13

PAGE 18 OF 23 73

researching and evaluating the market
for film music, but it is a factor we
must consider in weighing respondent’s
expert’s testimony. In fact,
respondent’s expert admitted she sends
customers desiring cinema material to
Luboviski because he deals in such items
while she generaly does not. In
addition, we think it sigsnificant that
respondent’s expert placed a great deal
of significance on Jarre’s absence from
a 1959 edition book discussion 20
composers, despite the fact that Jarre’s
success and recognition, at lealst in the
United States, came in the 1960’s for
film music. Furthermore, we believe the
record shows that respondent’s expert
was not fully aware of Jarre’s foreign
accomplishments and reputation.
Respondent does not claim that Jarre

is unknown among his professional

associates. Respondent readily admits

APPENDIX 13

PAGE 19 OF 23 74

that Jarre is one of the top 10
composers of film music. Respondent
also recognizes that the condition of
the contributed materials is very good
and, as his expert stated, their content
and appearance is attractive and
interesting. Nor does respondent
contend that Jarrre’s contributed
material has no value. Indeed, it would
be odd for the University of Southern
California to solicit Jarres works if
they had no value. Rather, respondent’s
position, apart from attacking
petitioner’s experts’ appraisal, is that
there is a very small, if any, market
for the type of material donated or for
Jarre’s material in particular. As
grounds for his argument respondent
points to the lack of recorded sales of
whole film scores, and the lack of

inquiries received by the witnesses in

this trial concerning sales of Jarre’s

APPENDIX 13

PAGE 20 OF 23
735

Or anyone else’s film scores, and
Jarre’s lack of name recognition among
other than his professional associates.
In addition, respondent asserts that the
depressing effect on the market of the
volume of Jarre’s contributed material
must be considered.

With respondent’s latter contention,
we agree. Estate of David Smith, 57
T.C. 650, 656-658 (1972), affd. 510 F.2d
479 (2nd Cir. 1975). However, with
respect to respondents first contention,
the fact that there may be a limited
market does not, in our opinion, prevent
the contributed property from having
substantial value. See Publicker v.
Commissioner, 206 F.2d 250 (3rd Cir.
1953), affd. T.C. Memo. 1952-163, cert.
denied 346 U.S. 924 (1954); George P.
Fisher, Executor, 3 B.T.A. 679 (1926).

It is however, a factor to consider.

Estate of David Smith, 57 T.C. at 655.

APPENDIX 13

a 3
AGE 21 OF 2 76

Considering the evidence of the
instant case we do believe respondent
has shown a somewhat limited market
for lengthy and complete music
manuscripts of film composers. There
was testimony from petitioners’
witnesses that they could recall only
one or two sales of and few, if any,
inquiries about such material.

On the other hand, we think the longer
manuscripts could, in some instances, be
broken down into shorter, more sealable
units, if necessary. There was evidence
submitted of a number of sales at
substantial prices of short or one-page
music manuscripts by popular culture
composers with whom we think Jarre is
comparable. In addition, we note that
several of Jarres one-page fair copies
of his music (admittedly worth less

than original manuscripts) were sold

between 1972 and 1974, some to dealers

APPENDIX 13

2
PAGE 22 OF 23 77

and some to collectors, for substantial
prices.
As for respondent’s claim that Jarre

has no name recognition except among
his professional essociates, we express
no opinion except to state that we
believe such fact, if true, to be of
little value. We cannot doubt that
Jarre’s music for films such as
"Dr.Zhivago”" (music of which sold some
14 million tapes and records) or
"Lawrence of Arabia" is itself
generally recognized and sought by the
public. This in turn, we believe, adds
to the desirability, and hence value, of
his less familiar works. Further, we
think Jarre’s premier role in the field
of writing music for films hae been
amply demonstrated.

. After carefully considering all the

evidence contained in the record, and

with the usuvuel obeisances to the

APPENDIX 13
PAGE 23 OF 23 78

vagaries of the judgment required by
this case, we conclude, and find as a
fact, that Jarres 1967 and 1968 gifts in
question had fair market values at the
time of contribution, of $45,000 and

$31, 000.

Decision will be entered under Rule 155.

APPENDIX 14 79
PAGE 1 OF 13

BERNARD GOSS AND NANCY C. GOSS,
PETITIONERS V. COMMISSIONER OF INTERNAL

REVENUE, RESPONDENT

Docket No. 3337-70.

Filed January 30, 1973.

1. Held, taxpayer is entitled to a
deduction under sec. 170, I.R.C. 1954,
for his donation of two essays of his
Own creation to a qualified charity; the
donation of the essays constituted a
contribution of property, and not of
services. Held, further, the essays had

a fair market value of $500.

r 2 Held, the Commissioner properly
disallowed deductions for alleged
business travel expenditures because
taxpayer did not comply with all the
substantiation requirements of sec.

274(d), I.R.C. 1954.

APPENDIX 14 80
PAGE 2 OF 13

George N. Plastiras, for the
petitioner.

G. Phil Harney, for the respondent.

Wiles, Judge: Respondent has determined
a deficiency in petitioner’s income tax
of $1,483.27 for taxable year 1967. The
issue for decision are:

(1) Whether petitioners are entitled to
a charitable deduction for petitioner’s
donation of two essays to a certain
charity, and if so0, what the fair market
value of those essays was at the time of
donation.

(2) Whether certain expenses incurred
by petitioner for travel in 1967 are
deductible as ordinary and necessary

business expenses.

FINDINGS OF FACT

APPENDIX 14 81
PAGE 3 OF i3

Some of the facts have been stipulated
and are found accordingly.

Petitioners are Bernard Goss —
(hereinafter referred to as petitoner)
and Nancy C. Goss, husband and wife, who
resided in Little Rock, Ark., at the
time of the filing of the petition
herein. They filed a joint Federal
income tax return for the taxable year
1967 with the district director of
internal revenue in Little Rock, Ark.

During 1960 end 1961 petitioner was
employed by the Federal Reserve Bank of
Dallas, Tex., as an industrial
economist. From 1963 to 1966 petitioner
was an assistant professor of economics,
finance, and marketing at St. Edward’s
University, Austin, Tex. From June
1966 to January 29, 1967, petitioner was
employed as a technical assistance
officer and economist at the Austin,

Tex., regional office of the Economic

APPENDIX 14 82
PAGE 4 OF 13

Development Administration. Throughout
the remainder of 1967 petitioner was
employed as an economic research
specialist with the Ozark Regional
Commission, Little Rock, Ark..

On November 10, 1967, petitioner made a
gift of two essays to the National
Council of Negro Women, a qualified
charitable organization. The petitioner
prepared these two essays, which are
entitled "The Negro Woman’s Income Gap”
and "Urban Spatial Economic/Social
Inter-Relationships." The purpose of
these essays was to provide the National
Council of Negro Women with policies
and objectives regarding the creation of
adequate and positive economic
opportunities for low-income groups.

Tne essays vere based on the results of
@ survey conducted by petitioner.

On his 1967 Federel income tax return,

petitioner, claimed a deduction for

APPENDIX 14 83
PAGE 5S OF 13

charitable contribution of the essays to
the National Council of Negro Women. In
claiming that deduction petitioner
repcrted a fair market value of $1,500
for the essays. Respondent disallowed
the deduction claimed with respect to
the donation of the essays except for
$50 allowed for certain out-of-pocket
expenses. In his amended petition,
petitioner reported a fair market value
of $2,250 for the essays.

On his 1967 return, petitioner also
claimed a business expense deduction in
the amount of $1,246, part of which was
expended for travel. Respondent
disallowed the claimed dedution with
respect to certain travel expenses.
Although the parties stipulated that the
travel expenses in issue amounted to
$860.99, the petitioner now contends

that the travel expenses incorrectly

disallowed by the respondent eamounted to

APPENDIX 14 84
PAGE 6 OF 13

$728.14.

OPINION

Section 170(A). I.R.C. 1954, allows as
@ deduction any charitable contribution
when peyment is made within the taxable
year. Section 170(c) defines a
chariteble contribution as a
contribution or gift to or for the use
of certain specified classes of
organizations. Respondent agrees that
the National/Council of Negro Women
quelifies es a member of these
specified classes.

The regulations provide that no
deduction is allowable pursvant to
section 170 for contribution of
services. Sec. 1.170-2(a)(2), Income
Tax Regs. The regulations also provide
that if a contribution is made in

property other than money, the amount of

APPENDIX 14 85
PAGE 7 OF 13

the deduction is determined by the fair
market value of the property at the time
of the contribution. The regulations
define fair market value as the price at
which the property would change hands
between a willing buyer and a willing
seller, neither being under any
compulsion to buy or sell and both
having reasonable knowledge of relevant
facts. Sec. 1.170-1(c)(1), Income Tax
Regs.

Respondent contends that the donation
does not qualify for a charitable
deduction because it was in the nature
of services rather than of property.
Respondent also contends that even if
the donstion qualifies for a charitable
dudietinn, petitioner has failed to
establish the fair market value of the
donation.

We held in John R. Holmes, 57 T.C. 430

(1971), that the donation of two films

APPENDIX 14 86
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by the taxpayer who produced them to
certain qualified charities constituted
a contribution of property, and not of
services. The taxpayer, an independent
film producer, showed the completed
films on a television atation before
donating them to the charities.

One film, donated to a hospital, was
based on a musical comedy stege shoyw,
the purpose of which was to raise funds
for the cardiac center at the hospital.
The other film, donated to a boys’ club,
depicted the boys’ club’s various
activities and showed the poor condition
of its facilities.

We believe that the facts in the |
present case are analagous to the facts
in Holmes. In both situations,
petitioner donated artistic properties
that he himself had created. In Holmes
we noted that the donated film was

something different from the

ny

APPENDIX 14 87
PAGE 39 OF 1i3

petitioner’s services and the
unprocessed film. Similarly, the
completed manuscript was something
different from the petitioner’s services
and the blank paper. In both cases the
donor maintained physical ownership

over the property before it was

donated. Accordingly, we conclude that

the donation of artistic property,
whether it be a film production or an
essay, constitutes a donation of
property rather than of services. We
therefore hold that petitioner is
entitled to a deduction under section
170 for his donated two essays.

The amount of the deduction to which
petitioner is entitled is determined by
the fair market value of the essays at

the time of the contribution. What the

for market value of a piece of property
is at an given date is a question of

fact, to be resolved from a

APPENDIX 14 88
PAGE 10 OF 13

consideration and weighing of all the
relevant evidence in the record. Philip
Kaplan 43 T.C. 663 (1965). Although
petitioner presented testimony at trial
as to the fair market value of the
essays, respondent failed to call any
witnesses and failed to present any
evidence regarding fair market value.
Petitioner testified that he charged
$150 per day as a consulting fee, that
he worked on the essays for 15 days and
that the value of the essays therefore
is $2, 250. We are unable to accept
petitioners argument regarding the value
of the essays. Petitioner testified
that prior to the contribution of the
essays he had been employed as a
consultant for a fee of $150 per day
during April 1967. In his Federal
income tax return for 1967, petitioner
reported $150 as income from consulting

work. Thus, petitioner contends that

APPENDIX 14 89
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the value of his services in writing
the essays should be based on a fee
which he had charged for only 1 day
prior to the donation of the essays.
We are not persuaded that this single
instance provides a proper basis to
value the petitioner’s services as a
consultant.

Petitioner also testified that if the
essays had been contracted for in an
open market, they would have produced a
bid of between $610,000 and $20,000. The
basis for petitioner’s opinion was his
previous experience in adminieterng
approximately $3 million worth of
technical assistance contracts for the
Ozark Regional Commission. Petitioner,
however, did not have final grant
authority with regard to these
technicel assistance contracts.
Furthermore, petitioner presented no

evidence regarding the similarity

APPENDIX 14 90
PAGE 12 OF 13

between the essays in issue and the work
product specified in the technical
assistance contracts that he helped
administer. We are not persuaded by
petitioners self-serving and
uncorroborated testimony.

On the basis of the entire record, and
keeping in mind that petitioner has the
burden of proof, ve have determined that
the essays had a value of $500 at the
time they were donated to the National
Council for Negro Women.

Section 274 provides in part that no
deduction shall be allowed under section
162 or 212 for any traveling expenses
unless the taxpayer substantiates, by
adequate records or by sufficient
evidence corroborating his own
statement, the amount of the expenses,
the time and place of the travel, and
the business purpose of the travel.

Petitioner contends that he expended

APPENDIX 14 91
PAGE 13 OF 13

$728.14 for travel between Little Rock,
Ark., Oklahoma City, Okla., and Austin,
Tex., during the period of February 1967
through May 1967. Respondent concedes
that this amount was actually spent for
travel during 1967 but argues that
petitioner has failed to establish the
business purpose of the travel.
Petitioner testified that the purpose of
these trips related to his business.
Petitioner has failed, however, to
present adequate records or
corroborating evidence to substantiate
the business purpose of the travel. See
William F. Sanford, SO T.C. 823 (1968),
affirmed per curiam 412 F.2d 201 tC. APPZ,
1969), certiorari denied 396 U.S. 841
(1969). Under these circumstances,
petitioner is not entitled to any
deductions with respect to his claim

of travel expenses.

Decision will be entered under Rule S50.

APPENDIX 15 92
PAGE 1 OF 1

BLACK’S LAW DICTIONARY

Abridged Fifth Edition

Definition:

"Spontaneous declaration. A statement
is admissible as a ""spontaneous
declaration”* if there was an occurrence
sufficiently startling to produce a
spontaneous and unreflecting statement,
if there was an absence of time to
fabricate, and if the statement related
to the circumstances of the

occurrence."

APPENDIX 16 723
PAGE 1 OF 1

AEROSPACE ENGINEERING

(Magazine)

APRIL 1989 EDITION

"Raytheon rolis-out AMRAAM”
"The U.S. Air Force is expected to
receive the first production Advanced
Medium Range Air-to-Air Missile (AMRAAM)
from the second-source contractor when
Raytheon Corp. roll out of the missile
in late February. AMRAAM will be a
""launch and leave"" radar guided
missile, designed to maintain air
superiority well into the next century.
AMRAAM is being produced by both Hughes
Aircraft Corporation and Raytheon.
Hughes rolled out its first production
missile iast October. The first
operaticnal AMRAAM is due to be
delivered to Tactical Air Command’s 3rd

Tactical Fighter Wing in Fall 1989."

APPENDIX 17 94
PAGE 1 OF 2

AVIATION WEEK AND SPACE TECHNOLOGY

Magazine: i987 Month Unknown
SCIENCE/SCOPE

1987 Hughes Aircraft Company

succession and scored two successes
despite evasive maneuvers by the target
drones. Both drones were flying at
26,000 feet above the White Sands
Missile Range in New Mexico. The F-16
was flying at approximately the same
speed, but 10,000 feet below the drones.
In the terminal phase of the flight, the
drones made evasive maneuvers, one a
sideways turn, the other a dive at

three times the force of gravity. Both

APPENDIX 17 93
PAGE 2 OF 2

AMRAAMB using their on-board active
radar continued to track to intercept.
This was the first multiple-launch for
the Hughes-built AMRAAM and the 20th
successful launch in 23 missions, the
most successful test program ever for a
complex missile. AMRAAM, under full
scale development for the U.S. Navy and
Air Force, is expected to increase the
effectiveness of the F-16 by a factor of

B81.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386003_0723%3A1. Public record. Not legal advice.