Thompson v. Comr., 140 T.C. No. 4 (2013)

(petitioner is president of company that is owned by a trust with petitioner and spouse as trustees; petitioner failed to pay employment taxes and IRS moved to levy to collect and notified petitioner that tax lien had been filed; petitioner had previously failed to pay employment taxes and income taxes and those taxes and associated penalties also remained unpaid; petitioner sought partial payment installment agreement and reported monthly income of $27,633 and monthly expenses of $24,416 including $2,110 of tithe (well short of the biblical 10 percent) and college expenses for child of $2,952; petitioner proposed to pay $3,000 monthly on unpaid tax liabilities on total amount owed of $888,351.15 which, without interest, would take petitioner 24 years to pay in full; IRS only allowed $19,244 in monthly expenses as necessary living expenses to be set aside with tithe and college expenses as conditional expenses; as such, IRS determined that petitioner could make monthly payment of $8,389 on unpaid tax liability; court upheld IRS determinations - tithing not for production of income or for petitioner's health and welfare (alleged spiritual health and welfare irrelevant) and not made as condition of employment (petitioner's "employment" with religious organization only as unpaid volunteer and is not tied to production of income) but is purely voluntary; no violation of First Amendment because IRS not interfering with religious organization's decision as to whether to keep petitioner as unpaid volunteer (IRS not responsible for extra-biblical beliefs of petitioner's religious organization) and petitioner not entitled to use the Constitution to escape paying delinquent tax liabilities and penalties so as to pay tithe; no violation of Religious Freedom Restoration Act of 1993; IRS has compelling interest in collecting taxes in timely manner and IRS settlement officer acted reasonably; tithe is conditional expense; same holding for college expenses).