Almost everybody knows about the deduction for charitable contributions. But very few students come to tax class knowing much about how it works or having considered why it might be complicated. And yet, the sheer length of section 170 hints at its complexity.

In this episode, Professor Brian Galle discusses three mechanics of the rules: the overall cap on deductible contributions, the interaction of the deduction with realization rules, and the requirement to exclude any benefits received from the amount given. Professor Galle also explores the underlying tax policy considerations and illustrates the practical effects of these mechanical rules. Professor Galle is the Agnes Williams Sesquicentennial Professor of Tax Policy at Georgetown University Law Center.

Tax Class is hosted by ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Leff⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and produced by Tony Xu. The theme music is by Doo Dah Music. None of the information presented in this podcast constitutes legal advice. Consult an attorney or a tax professional for guidance.

IN THIS EPISODE

· IRC § 170

· Treas. Reg. § 1.170A-1

· Lary v. United States, 787 F.2d 1538 (11th Cir. 1986)

· Rolfs v. Commissioner, 668 F.3d 888 (7th Cir. 2012)

· Hernandez v. Commissioner, 490 U.S. 680 (1989)

What can you write off as a business expense? At the most general level, section 162 says “all the ordinary and necessary expenses” for the trade or business, as long as they are not disallowed elsewhere in the Code. But what is “ordinary” and what is “necessary”?

Professor Steven Dean points out that the “ordinary” requirement, by definition, favors the common practice and, therefore, disfavors the minority. What may seem merely surprising (or even shocking in some cases) may also reveal systemic privilege or even racism. As a casebook author himself, Professor Dean believes that its important for legal educators to provide relevant context, including about race, for students to draw their own conclusions. Professor Dean is a professor of law and the Paul Siskind Research Scholar at Boston University School of Law.

Tax Class is hosted by ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Leff⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and produced by Tony Xu. The theme music is by Doo Dah Music. None of the information presented in this podcast constitutes legal advice. Consult an attorney or a tax professional for guidance.

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IN THIS EPISODE

· IRC §§ 162(c), (f), (g); 280E

· Kopp’s Company, Inc. v. United States, 636 F.2d 59 (4th Cir. 1980)

· Cavanaugh v. Commissioner, T.C. Memo. 2012-324

· Gilliam v. Commissioner, 51 T.C.M. 515 (1986)

· Dancer v. Commissioner, 73 T.C. 1103 (1980)