Gilkey Vander Weele, 27 T.C. 340 (1956), affd. 254 F. 2d 895 (C.A. 6, 1958).

The rule of thumb appears to be a reasonable application of the general rule established in the Guggenheim, Sanford, and Shaughnessy cases because where there is a reasonable possibility that the entire corpus might be repaid to the settlor there can be no assurance that anyone else will receive anything in the form of a gift, and if the corpus should happen to be kept intact until the settlor's death, even though the transfer in trust was not subjected to a gift tax, the corpus of the trust will in all likelihood be subjected to the estate tax in the settlor's estate. See Estate of John J. Toeller, supra; Estate of Lelia E. Coulter, supra.

Applying the above principles to the facts under consideration here, we conclude that no part of or interest in the property transferred to the trust constituted a completed gift for gift tax purposes when

transferred to the trust.

The form of the trust agreement indicates that the principal beneficiary of the income, and the principal if it became desirable for his welfare, comfort, support, or emergency needs, was the settlor. The first instructions to the trustee, as shown by the part of the deed of trust quoted in our Findings of Fact, were to distribute net income and principal to the settlor during his lifetime. Only upon the death of the settlor, and if she survived him, was any provision made for payment of either income or principal to the settlor's wife. And only upon the death of the survivor of settlor and his wife was any provision made for distribution of the "then-remaining principal." The trustee had the unfettered power to use all of the corpus for the benefit of settlor, if it thought that it was desirable for the welfare, comfort, or needs of the settlor. The words used were broad enough to cover about anything Leon might want or need. It is reasonable to assume that the trustee would invade corpus and that it would be required to do so by a court if the welfare, comfort, or needs of the settlor made it seem desirable. Otherwise, there would not have been much reason for including the paragraph giving the trustee power to invade principal. It was entirely possible that the entire corpus might be distributed during the settlor's lifetime and no one other than the settlor would receive any portion thereof. As long as that possibility was present, by reason of the language employed by the settlor, the settlor had not abandoned sufficient dominion and conMassachusetts law, with Herzog v. Commissioner, 116 F. 2d 591 (C.A. 2, 1941), affirming 41 B.T.A. 509 (1940), involving New York law. See also Restatement, Trusts, sec. 156(2). While we do not rely on this theory and hence are not called upon to interpret the Pennsylvania law, a cursory examination of the law of that State would indicate it would follow the rule in Michigan and Massachusetts that will not permit a settlor to place property in trust for his own benefit and keep it beyond the reach of creditors. See Morton v. Morton, 394 Pa. 402, 147 A. 2d 150 (1950); In re Mogridge's Estate, 342 Pa. 308, 20 A. 2d 307 (1941); Hay v. Price, 15 Pa. Dist. R. 144 (1905).

trol over the property transferred to make the gift consummate. Estate of John J. Toeller, supra.

In addition to the trust agreement itself, the evidence indicates that the settlor, who was 80 years of age when the trust was established, expressed concern over whether he would have available sufficient funds to meet his needs. He asked the trust officer whether he would have enough money to buy an automobile and the trust officer reassured him by telling him that the trust agreement provided for the payment of all income to him and that he could also have money out of the principal, and that the trustee would be liberal in giving him money out of the principal. While the term "liberal" is not defined, the above conversation indicates the understanding of the parties was that the trustee recognized that principal should be distributed at any time the settlor's needs reasonably justified it.

The evidence also indicates that one reason Leon established the trust was because he was having difficulty managing the property placed in the trust. The original property transferred to the trust consisted of approximately 200 small mortgages which had been kept in a metal container in Leon's basement, the records on which the trustee discovered to be very inaccurate and inadequate. It is probable that management of the trust property was more of a motivating factor for Leon's establishment of the trust than a desire to put what appears to have been a considerable part of his remaining property completely beyond his reach.

While the language used in the trust instruments and the surrounding circumstances involved in the Vander Weele and Gramm cases were a little different than the language used in this trust instrument and the circumstances here involved, we think they were close enough to compel the conclusion we reach here. We do not believe respondent's argument that because of Leon's wealth it was very unlikely that the trustee would ever be called upon to use much of the corpus is well founded. It appears from the evidence that when Leon established this trust he had given away most of his property.

Decision will be entered for the petitioner.

KENNETH LINGENFELDER AND BARBARA R. LINGENFELDER, PETITIONERS, V. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Docket No. 91508. Filed April 10, 1962.

The petitioners claimed certain deductions for gifts to religious organizations and declined to substantiate them, contending that the provision of the Internal Revenue Code requiring substantiation of religious contributions is unconstitutional because it interferes with the free exercise of petitioners' religious beliefs. Held: Even if the provision of the statute requiring verification of charitable contributions were invalid because contrary to the Constitution, the

petitioners would not be entitled to the deductions without substan-
tiation. The requirement of verification is so closely related to the
granting of the deduction in the statute that if the provision for
verification were to be held invalid, the grant of the deduction would
also fall.

Kenneth Lingenfelder, pro se.

Robert L. Gnaizda, Esq., for the respondent.

The Commissioner determined a deficiency in the petitioners' income tax for the calendar year 1959 in the amount of $253.20. The sole issue for decision is whether the petitioners are entitled to charitable deductions claimed on their return for contributions to religious organizations.

FINDINGS OF FACT.

The petitioners are husband and wife. They filed their joint Federal income tax return for the calendar year 1959 with the district director of internal revenue at Portland, Oregon. On their return for 1959 the petitions deducted certain gifts to religious organizations as charitable contributions. The Commissioner disallowed these deductions for lack of substantiation.

At the trial of this case the petitioners declined to present any evidence which would establish that they had, in fact, made the claimed contributions. They based their refusal on the assertion that any requirement that they substantiate their contributions to religious groups would be violative of their rights under the first amendment of the Constitution of the United States.

OPINION.

FAY, Judge: The petitioners contend that they are entitled to the deduction claimed for contributions to religious groups without substantiating them because a requirement that they reveal the recipients of such contributions would interfere with the free exercise of their religion under the first amendment of the Constitution.

However, we need not decide whether there is any repugnancy between the first amendment and a taxing scheme which requires the revelation of the recipients of religious contributions in order to qualify for a deduction. Even if there were such a repugnancy, it would not benefit the petitioners.

Section 170 (a) (1) of the Internal Revenue Code of 1954 provides, in part, as follows:

(1) GENERAL RULE.-There shall be allowed as a deduction any charitable contribution *** payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary or his delegate.

trol over the property transferred to make the gift consummate. Estate of John J. Toeller, supra.

In addition to the trust agreement itself, the evidence indicates that the settlor, who was 80 years of age when the trust was established, expressed concern over whether he would have available sufficient funds to meet his needs. He asked the trust officer whether he would have enough money to buy an automobile and the trust officer reassured him by telling him that the trust agreement provided for the payment of all income to him and that he could also have money out of the principal, and that the trustee would be liberal in giving him money out of the principal. While the term "liberal" is not defined, the above conversation indicates the understanding of the parties was that the trustee recognized that principal should be distributed at any time the settlor's needs reasonably justified it.

The evidence also indicates that one reason Leon established the trust was because he was having difficulty managing the property placed in the trust. The original property transferred to the trust consisted of approximately 200 small mortgages which had been kept in a metal container in Leon's basement, the records on which the trustee discovered to be very inaccurate and inadequate. It is probable that management of the trust property was more of a motivating factor for Leon's establishment of the trust than a desire to put what appears to have been a considerable part of his remaining property completely beyond his reach.

While the language used in the trust instruments and the surrounding circumstances involved in the Vander Weele and Gramm cases were a little different than the language used in this trust instrument and the circumstances here involved, we think they were close enough to compel the conclusion we reach here. We do not believe respondent's argument that because of Leon's wealth it was very unlikely that the trustee would ever be called upon to use much of the corpus is well founded. It appears from the evidence that when Leon established this trust he had given away most of his property.

Decision will be entered for the petitioner.

KENNETH LINGENFELDER AND BARBARA R. LINGENFELDER, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket No. 91508. Filed April 10, 1962.

The petitioners claimed certain deductions for gifts to religious organizations and declined to substantiate them, contending that the provision of the Internal Revenue Code requiring substantiation of religious contributions is unconstitutional because it interferes with the free exercise of petitioners' religious beliefs. Held: Even if the provision of the statute requiring verification of charitable contributions were invalid because contrary to the Constitution, the

petitioners would not be entitled to the deductions without substan-
tiation. The requirement of verification is so closely related to the
granting of the deduction in the statute that if the provision for
verification were to be held invalid, the grant of the deduction would
also fall.

Kenneth Lingenfelder, pro se.

Robert L. Gnaizda, Esq., for the respondent.

The Commissioner determined a deficiency in the petitioners' income tax for the calendar year 1959 in the amount of $253.20. The sole issue for decision is whether the petitioners are entitled to charitable deductions claimed on their return for contributions to religious organizations.

FINDINGS OF FACT.

The petitioners are husband and wife. They filed their joint Federal income tax return for the calendar year 1959 with the district director of internal revenue at Portland, Oregon. On their return for 1959 the petitions deducted certain gifts to religious organizations as charitable contributions. The Commissioner disallowed these deductions for lack of substantiation.

At the trial of this case the petitioners declined to present any evidence which would establish that they had, in fact, made the claimed contributions. They based their refusal on the assertion that any requirement that they substantiate their contributions to religious groups would be violative of their rights under the first amendment of the Constitution of the United States.

OPINION.

FAY, Judge: The petitioners contend that they are entitled to the deduction claimed for contributions to religious groups without substantiating them because a requirement that they reveal the recipients of such contributions would interfere with the free exercise of their religion under the first amendment of the Constitution.

However, we need not decide whether there is any repugnancy between the first amendment and a taxing scheme which requires the revelation of the recipients of religious contributions in order to qualify for a deduction. Even if there were such a repugnancy, it would not benefit the petitioners.

Section 170 (a) (1) of the Internal Revenue Code of 1954 provides, in part, as follows:

(1) GENERAL RULE.-There shall be allowed as a deduction any charitable contribution *** payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary or his delegate.