*2500 Contributions made to alleged charitable and educational corporations disallowed.
*828 In this proceeding the petitioner seeks a redetermination of his income-tax liability for the calendar year 1920, for which the respondent first determined a deficiency in the amount of $910.73. This amount has been reduced by agreement of the parties so that there only remains in controversy $114.70. The proposed deficiency arises from the disallowance by the Commissioner as deductions from gross income of amounts paid to alleged charitable and educational corporations on the ground that the corporations in question do not come within any of the classes specified in section 214(a)(11) of the Revenue Act of 1918.
FINDINGS OF FACT.
In the year 1920 the petitioner made contributions to the organizations and in the amounts named below:
| Y. D. Club | $50 |
| North American Civic League for Immigrants | 25 |
| International Reform Bureau | 100 |
| Scientific Temperance Federation | 25 |
| Massachusetts Anti-Saloon League | 100 |
| Massachusetts Anti-Cigarette League | 10 |
*2501 (1) The "Y. D. Club, Boston Chapter Yankee Division Veterans' Association, called the Y. D. Club of Boston," is a Massachusetts corporation formed for the purpose of establishing and maintaining a clubhouse in the City of Boston for the promotion of social intercourse between, and for the welfare of, former members of the Twenty-sixth Division; for their education and the fostering of good citizenship; as a center to keep the traditions and spirit of the Division alive; and as a memorial to its dead. The corporation by its charter may *829 not operate for profit; all receipts whether for dues or otherwise are required to be devoted to the maintenance of the club, the welfare of its members and the perpetuation of the records of the Division. The money contributed by the taxpayer was to go toward the cost of constructing and equipping a building for the Y. D. Club.
(2) The North American Civic League for Immigrants is an un-incorporated voluntary association composed of a limited number of members. Its express purpose is to accomplish the civic betterment of immigrants. It has a written constitution, which provides that it shall be controlled by a body of 15 persons, *2502 who are named, and their successors who shall be elected at a meeting of the members. The constitution provides for a president, vice president, treasurer, and clerk, to be elected annually. Its agents meet immigrants at the ports and give them information and advice. Later the immigrants are met in their communities and are given opportunity through information bureaus to find out the things they may wish to know. The agents in charge of the bureau advise them to learn the English language as early as possible; direct them to public schools and other organizations; assist in getting them enrolled in evening schools; instruct them directly and provide instructors for evening classes. The League endeavors to have the immigrants instructed in the English language and in the underlying principles of this Government. No part of any net earnings inures to the benefit of any individual. None of its funds are used to assist those who are sick or in distress; its agents and secretaries direct such cases to those organizations or agencies which are equipped to do so. Its total expenditures in 1920 were $44,667, of which about $26,000 was for salaries.
(3) The International Reform*2503 Bureau (now called the International Reform Federation) is a corporation of the District of Columbia, the purpose of which is stated as follows:
The object of this corporation shall be to promote those Christian reforms on which the churches socialogically agree while theologically differing, such as the defense of the Lord's Day and of purity, the suppression of intemperance, gambling and political corruption; and the substitution of arbitration and conciliation for both industrial and international law.
Its operations consist of endeavoring through the dissemination of literature and by advocating legislation to attain its stated objects. It has advocated prohibition, abolition of gambling and vice, and the improvement and betterment of motion pictures, and it publishes a periodical called the "National Lecturer." The literature is placed before the public through the National Lecturer, by correspondence, and through the newspapers. It also conducts public lectures. In 1920 the Bureau supported candidates for public office who stood for the principles advocated by the Bureau. It is not operated for profit.
*830 (4) The Scientific Temperance Federation is a Massachusetts*2504 corporation organized for the purpose of collecting and disseminating information concerning hygiene and the nature and effects of alcoholic drinks and other narcotics. It gathers data on the nature and effects of alcoholic drinks and maintains a classified library thereon. It puts information and data which it collects into pamphlets, leaflets, posters, slides, etc., which it disseminates through temperance and educational organizations. In 1920, addresses were made by members of its staff before schools, colleges, conventions and general public audiences on the scientific, social and educational aspects of the subject. The income of the Federation is derived from memberships, individual contributions and from pay received for preparing articles and other material for organizations who wish to use them. It is not operated for profit and no part of any net earnings inures to the benefit of any individual. In 1920 its total expenditures were $9,424, of which $6,162 was for salaries and rent.
(5) The Massachusetts Anti-Saloon League is an unincorporated voluntary association having a constitution which states its object as follows:
The object of this League is the extermination*2505 of the beverage liquor traffic for the accomplishing of which the alliance of all who are in harmony with this object is invited. This League pledges itself to avoid affiliations with any political party as such and to maintain an attitude of strict neutrality on all questions of public policy not directly and immediately concerned with the traffic in beverage intoxicants.
It has a board of trustees and an executive committee. The former determines questions of policy or procedure, in harmony with the policies and plans of the Anti-Saloon League of America. The officers are a president, one or more vice presidents, a secretary, and a treasurer, and such other officers as the board of trustees may determine. The constitution also provides that they shall elect annually a state superintendent upon the nomination of the general superintendent of the Anti-Saloon League of America.
In its activities it endeavors to influence public sentiment in favor of prohibition and the enforcement of prohibition laws. Its income is derived entirely from contributions and no part of any net earnings inures to the benefit of any individual. During the year 1920 it expended $57,655.08. A part*2506 of this amount was expended for services of counsel in connection with legislation, to advise with committees of the Legislature, and to further propose legislation. There was a referendum campaign in 1920 in which the League spent some money which is not included in the above amount.
(6) The Massachusetts Anti-Cigarette League in 1920 had an agent or agents engaged in lecturing in the Sunday schools and day schools against cigarette smoking. It was unincorporated and since has gone out of business. It was not operated for profit.
*831 The respondent determined a deficiency for the taxable year in question in the amount of $910.73. All the matters in controversy have been settled except the deductibility from gross income of the contributions to the six above-mentioned organizations, which the respondent ruled did not come within the classes specified in section 214(a)(11) of the Revenue Act of 1918, leaving undecided a deficiency of approximately $114.70.
OPINION.
GREEN: The petitioner alleges that the respondent erred in refusing to allow as a deduction from gross income the amounts paid to several alleged charitable and educational corporations under the provisions*2507 of section 214(a)(11) of the Revenue Act of 1918, which reads as follows:
(a) That in computing net income there shall be allowed as deductions:
* * *
(11) Contributions or gifts made within the taxable year to corporations organized and operated exclusively for religions, charitable, scientific, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual, or to the special fund for vocational rehabilitation authorized by section 7 of the Vocational Rehabilitation Act, to an amount not in excess of 15 per centum of the taxpayer's net income as computed without the benefit of this paragraph. Such contributions or gifts shall be allowable as deductions only if verified under rules and regulations prescribed by the Commissioner, with the approval of the Secretary. In the case of a nonresident alien individual this deduction shall be allowed only as to contributions or gifts made to domestic corporations, or to such vocational rehabilitation fund.
In order to be exempt, the corporation or association must meet three tests: (a) It must be organized and operated*2508 for one or more of the specified purposes; (b) it must be organized and operated exclusively for such purposes; and (c) no part of its income must inure to the benefit of private stockholders or individuals.
It appears that all of the societies to which the petitioner contributed meet the third test, i.e., no part of the income inured to the benefit of the stockholders or to an individual. As to the other two tests, we will discuss each corporation or association separately in the order in which they were previously mentioned.
The "Y. D. Club" is a social club organized and maintained as a center for the former members of the Twenty-sixth Division, and to serve as a memorial to its dead. A further purpose was that of education and the fostering of good citizenship. We are of the opinion that it was not organized exclusively for educational purposes and hence not within the exemption.
The North American Civic League for Immigrants, the Massachusetts Anti-Cigarette League, and the Massachusetts Anti-Saloon *832 League are all unincorporated associations. The evidence does not satisfy us that these associations meet the statutory requirements as "corporations organized*2509 and operated exclusively for religious, charitable, scientific or educational purposes." See , and . The evidence shows that the Scientific Temperance Federation was incorporated. It also shows that it, together with the Massachusetts Anti-Saloon League and the Massachusetts Anti-Cigarette League, were formed to disseminate controversial or partisan propaganda and were not educational within the meaning of the statute.
The International Reform Bureau (now called the International Reform Federation), both from the purpose as stated as well as from the fact that it supported candidates for public office who stood for the principals advocated, fails to meet the above mentioned tests.
Judgment will be entered for the Commissioner.
Considered by STERNHAGEN, LANSDON, and ARUNDELL.