Hernandez v. Commissioner
United States Supreme Court
490 U.S. 680 (1989)
Hernandez (plaintiff), a Church of Scientology member, paid fixed, set prices for auditing and training sessions the church offered, with refunds available for unused portions; church members could progress through sequential levels of spiritual awareness via auditing, and could become auditors themselves only through further paid training. Hernandez deducted these payments as charitable contributions on his federal income taxes, but the IRS (defendant) disallowed the deductions, and the Tax Court agreed the payments weren't deductible.
Whether a payment to a religious organization is a deductible charitable contribution when the taxpayer receives, and expects to receive, specific goods or services of value in exchange for that payment.