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§ 3.1 MEANING OF GIFTof similar insurance policies, the Court reached the conclusion that the membershad received full value for what they paid in the form of insurance premiums.Essentially the same rule was subsequently articulated by the Court when itruled that an exchange having an “inherently reciprocal nature” was not a giftand thus could not be a charitable gift, even though the recipient was a charity. 21In this case, the Court considered the character of payments to the Church of Scientology,which provides “auditing” sessions designed to increase members’spiritual awareness and training courses at which participants study the tenetsof the faith and seek to attain the qualifications necessary to conduct auditingsessions. The church, following a “doctrine of exchange,” set forth schedules ofmandatory fixed prices for auditing and training sessions, although the pricesvaried according to a session’s length and level of sophistication.The payors contended that the payments were charitable contributions. TheCourt disagreed, holding that the payments were made with an expectation of aquid pro quo in terms of goods or services, which are not deductible. The Courtfocused on the fact that the church established fixed prices for the auditing andtraining sessions, calibrated particular prices to sessions of particular lengthsand sophistication levels, returned a refund if services went unperformed, distributed“account cards” for monitoring prepaid but as-yet-unclaimed services,and categorically barred the provision of free services.Reviewing the legislative history of the charitable contribution deduction,the Court found that “Congress intended to differentiate between unrequitedpayments to qualified recipients and payments made to such recipients in returnfor goods or services. Only the former were deemed deductible.” 22 In this case,charitable deductions were not allowed because the payments “were part of aquintessential quid pro quo exchange.” 23 In so holding, the Court rejected theargument that payments to religious organizations should be given special preferencein this regard. 24 Several years before, the IRS published its position on thepoint, holding that payments for the auditing and training sessions are comparableto payments of tuition to schools. 25A third opinion from the Supreme Court on this point held that funds transferredby parents to their children while the children served as full-time, unpaidmissionaries of a church were not deductible as charitable contributions to or forthe use of the church. 26 This opinion turned on whether the funds transferred tothe children’s accounts were deductible as contributions for the use of the church.In deciding this issue, the Court looked to the legislative history of this term andconcluded that this phraseology was intended by Congress to convey a meaning21 Hernandez v. Commissioner, 490 U.S. 680, 692 (1989).22 Id. at 690.23 Id. at 691.24 Cf. the dissent, id. at 704, which argued that the quid was exclusively of spiritual or religious worth and thatprecedents show that, in somewhat comparable circumstances, the IRS has a practice of allowing deductionsfor fixed payments for religious services.Subsequently, Congress, in the context of writing law as to charitable gift substantiation requirements andquid pro quo contributions, created exceptions for intangible religious benefits (see §§ 21.1(b), 22.2).25 Rev. Rul. 78-189, 1978-1 C.B. 68. In Brown v. Commissioner, 62 T.C. 551 (1974), aff’d, 523 F.2d 365 (8thCir. 1975), it was held that the payments are not deductible as medical expenses. IRC § 213.26 Davis v. United States, 495 U.S. 472 (1990). 61