An attorney
and his wife donated cash and a conservation easement to a charity. Because of
his concern about recent IRS's challenges to improper charitable contribution
deductions for transfers of easements on real property to charities, the
attorney (donor) obtained a comfort letter from the charity promising to refund
the entire cash endowment and remove the conservation easement if the IRS
disallowed the deductions in full. Nearly a year later, the charity sent a
letter to the attorney, informing him that the terms of the comfort letter
could affect the deductibility of the contribution and offering to withdraw the
provision for refund if the IRS disallowed the deductions. However, the donor
didn't ask the charity to withdraw the refund offer. The Tax Court concluded that
the charity's formal offer to withdraw the refund provision indicated that it
intended to honor its promise in the comfort letter (even if it may not have
been legally enforceable). According to the Court, the comfort letter
"rendered the gifts conditional and, thus, nondeductible." Lawrence
G. Graev , 140 TC No. 17 (2013).
