The Supreme Court has declined to review a Ninth Circuit decision denying deductions for religious education expenses. Specifically, the Ninth Circuit held that a husband and wife couldn't claim a charitable contribution deduction for tuition and fees paid to their children's Orthodox Jewish Day Schools or for separate payments made for their children's after-school religious education classes.

 
Facts. On their '95 tax return, the Sklars claimed $15,000 in deductions for purported charitable contributions that comprised a portion of their five children's tuition at Orthodox Jewish Day Schools. The deduction was based on their estimate that 55% of the tuition payments were for purely religious education, an estimate supported by letters submitted in '97 that were drafted by the schools at the Sklars' request.

 
IRS disallowed the $15,000 deduction. It also determined the Sklars failed to meet the substantiation requirements of Code Sec. 170(f)(8) with respect to the disallowed $15,000 of claimed charitable contributions. The Sklars petitioned the Tax Court for a redetermination of deficiency, asserting that (1) the tuition and fee payments to exclusively religious schools were deductible under a dual payment analysis to the extent the payments exceeded the value of the secular education their children received; (2) Code Sec. 170(f)(8) , as enacted in '93, authorized the deduction of tuition payments for religious education made to exclusively religious schools; and (3) that the '93 Closing Agreement between the Commissioner and the Church of Scientology constitutionally and administratively requires IRS to allow other taxpayers to take the same charitable deductions for tuition payments to their religious schools.

 
The Tax Court rejected the Sklars' arguments, holding that the tuition and fee payments to the Jewish Day Schools were not deductible under any of their theories.

 
Ninth Circuit. The Court of Appeals held that the Tax Court correctly concluded that neither Code Sec. 170(f)(8) , nor Code Sec. 6115 , as amended in '93, nor the accompanying legislative history suggested that Congress intended to make a substantive change to the Code or to overrule the long line of cases precluding deductibility of tuition payments to religious schools. The Court stressed that, had Congress intended to overrule judicial precedent and to provide charitable contributions for tuition and fee payments to religious organizations that provide religious education, it would have expressed its intention more clearly.

 
The Ninth Circuit also held that the Tax Court correctly concluded that no part of the Sklars' tuition payments was deductible under a "dual payment" analysis involving both a purchase and a contribution. The Ninth Circuit agreed with the Tax Court that the Sklars' tuition was not deductible, in whole or in part, under Code Sec. 170.

 
Finally, the Appeals Court found that the Tax Court correctly held that neither the Establishment Clause of the Constitution nor principles of administrative consistency allow the Sklars the deductions they sought, and the Tax Court's denial of discovery regarding the Closing Agreement in proceedings involving the deductibility of the Sklars' tuition and fees was not an abuse of discretion.

 
Supreme Court. In their request for review, the Sklars framed the issue as whether IRS may permit practitioners of one religion to deduct payments for religious instructions but bar practitioners of other religions from doing so. However, as noted, the Court declined to review the case.