## Facts

- Harold and Enid Davis, members of the Church of Jesus Christ of Latter-day Saints, had two sons serving as full-time, unpaid missionaries.
- The Church requested that the parents provide financial support, set suggested amounts, and issued written guidelines stating the funds were to be used exclusively for missionary work.
- The Davises deposited money directly into their sons’ personal checking accounts.
- The sons used the money primarily for living and mission-related expenses (e.g., rent, food, transportation, personal needs) while serving.
- The Church did not receive or hold the funds and had no legal right to compel the sons’ compliance with Church spending guidelines, though it required periodic expense reporting.
- The Davises claimed charitable deductions under 26 U.S.C. § 170 on amended returns; the IRS disallowed the deductions, and the Davises sued for refunds.
- The district court entered summary judgment for the United States, and the Ninth Circuit affirmed.

## Issues

1. Whether funds paid by taxpayers into their sons’ personal accounts to support missionary work are contributions “for the use of” a qualified charitable organization under 26 U.S.C. § 170.
2. Whether those payments are deductible as “unreimbursed expenditures made incident to the rendition of services” to a qualified organization when the services were performed by the taxpayers’ sons rather than the taxpayers.

## Decision

- The Supreme Court affirmed the judgment for the United States in a unanimous opinion by Justice O’Connor.
- The payments were not contributions “for the use of” the Church because they were not made under a legally enforceable trust-like arrangement giving the Church possession and control.
- The payments were not deductible as unreimbursed expenditures incident to the rendition of services because the Davises did not themselves perform the charitable services.

## Legal Principles

- In § 170, “for the use of” refers to contributions made in a legally enforceable trust or similar legal arrangement benefiting a qualified organization, effectively akin to “in trust for.”
- For “for the use of” treatment, the qualified organization must have legally enforceable possession and control over the donated funds; informal supervision, guidelines, or reporting requirements are insufficient without enforceable control.
- Courts may accept a contemporaneous and long-standing IRS interpretation of ambiguous statutory language when it is reasonable and consistent with statutory history and purpose.
- Unreimbursed expenditures are deductible only when incurred incident to the taxpayer’s own rendition of services to the qualified organization; payments supporting another person’s services do not qualify.

## Conclusion

The Court held that parents’ payments deposited into missionaries’ personal accounts were not deductible charitable contributions “for the use of” the Church because the Church lacked trust-like legal control, and the payments also failed as “unreimbursed expenditures” because the parents did not personally render the charitable services.


Davis v. United States, 495 U.S. 472 (1990)