Graham v. Commissioner of Internal Revenue, 490 U.S. 680 (1989)

2012-06-29 07:28:00

The Church of Scientology holds sessions for participants to better understand their spiritual being; it charges mandatory and fixed prices (which vary according to length and sophistication of the content) for these ‘‘auditing’’ sessions. Free sessions are not allowed by the church, and participants receive receipts and vouchers indicating uncompleted sessions. Katherine Graham et al. brought the case before the Court to question whether fees for ‘‘auditing sessions’’ can be considered charitable contributions to the church and thus deductible according to the Internal Revenue Code. The commissioner of internal revenue ruled that these fees did not constitute charitable contributions. Subsequent rulings in tax court and the court of appeals affirmed this decision. Writing for a majority of the Court, Justice Marshall affirmed the decision of prior courts. The payments in question are not considered charitable contributions because they are payments for services rendered by the church. Participants were not contributing of their free will, but as compensation for a specific service. ‘‘Congress intended to differentiate between unrequited payments to qualified recipients, which are deductible, and payments made to such recipientswith someexpectation of quid pro quo in terms of goods or services, which are not deductible,’’ concluded Justice Marshall. The payments to the Church of Scientology were thus not deductible and the taxation of such income paid out to the church was not a violation of the free exercise clause. JOHN GREGORY PALMER References and Further Reading Dejong v. Commissioner, 36 T.C. 575 (1961). United States v. Lee, 455 U.S. 252. GRAND JURY A grand jury is a panel of citizens selected to represent the community in performing an inquisitorial function, as distinguished from a trial, or petit, jury that renders a verdict in a dispositive trial. Traditionally, a grand jury has consisted of twenty-three persons. Twelve of these people are required to return a finding, called a presentment; sometimes, a specialized form of presentment called an indictment is returned. This is a finding, in response to a petition for a bill of indictment, that there is sufficient evidence against an accused criminal to authorize the complainant to prosecute him or her in a trial.

The qualifiers ‘‘grand’’ and ‘‘petit’’ refer to the size of the panel and mean ‘‘large’’ and ‘‘small,’’ respectively. In early English legal practice, the inquisitorial and veridical functions were combined, and trial juries commonly investigated the facts before reaching a conclusion. However, it became apparent that the process of investigation could lead to biased judgment, so the two functions became divided between two different kinds of juries.

Traditionally, grand juries, like trial juries, have been regarded as independent bodies, not accountable to anyone for how they reach their findings. A grand jury could investigate anything it chose and had total discretion in what it found and reported. It had the power to subpoena witnesses and evidence. It also had the power to decide who could be present during its deliberations and to keep those deliberations secret until it decided to report its findings.

However, would-be prosecutors, especially those who were already public officials, often felt that it was inconvenient to get an indictment from a grand jury and argued for merely filing an information with a court, allowing the judge to decide whether the evidence was sufficient. However, in the eighteenth century the practice of using the information to bypass the grand jury was used in various criminal prosecutions of a political character, mainly against dissidents and reformers, sometimes called ‘‘Whigs.’’ Because the American colonies were dominated by Whig views, this resulted in the demand for grand juries to screen criminal cases, and this demand became embedded in the Fifth Amendment: ‘‘No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury.’’

However, California removed the requirement for a grand jury in criminal cases. In the first major decision in which a right recognized in the U.S. Constitution was excepted from incorporation, California’s position was sustained by the U.S. Supreme Court, in Hurtado v. California, 110 U.S. 516 (1884), as not incorporated by the Fourteenth Amendment as a protected right against a state. Other states have continued the requirement, often in their state constitutions.

Originally, most criminal prosecutions in the United States were done by private parties—usually, lawyers hired for the case by the victims or their families, by law enforcement officials, or through public subscription—or who volunteered to serve pro bono. By the late nineteenth century, however, these were largely displaced by the advent of professional public prosecutors who were full-time, paid public officials, usually elected. Crime had been fairly rare in the early Republic, but as it became more common, private criminal prosecution became perceived as unequal to the caseload and lacking in the ability to gather the resources needed. Paying private lawyers to prosecute cases from public funds was also sometimes abused as a form of patronage.

The populations of counties eventually grew from the small sizes (typically less than three thousand persons) of the founding era, when crime was very rare by modern standards, to populous urban or suburban settlements, with higher crime rates. However, the legal system did not respond to the greater need by establishing grand juries for smaller jurisdictions, like wards or precincts, but continued to load county grand juries with more and more cases. Today, an urban grand jury may have only ten minutes for each case presented to it.

There has also been a trend toward the loss of independence of grand juries and domination of them by professional prosecutors, some of whom boast they can ‘‘indict a ham sandwich.’’ Grand juries have been isolated from the public they serve; in the view of many, they have been used abusively (especially against political dissidents) to interrogate witnesses without some of the protections they have in a trial.

Occasionally, members of a grand jury will resist manipulation by professional prosecutors and choose their own targets for investigation, even prosecutors or judges. These are called ‘‘runaway’’ grand juries, and some of their presentments are worthy of study.


References and Further Reading

  • Edwards, George J. The Grand Jury. 1906,
  • Roots, Roger, If It’s Not a Runaway, It’s Not a Real Grand Jury, Creighton Law Review 33 (1999–2000): 4:821,
  • Tooke, John Horne. Address on Libels, Case of John Horne (1777) (criticism of indictment by information, rather than by grand jury; may have contributed to requirement for grand juries in Fifth Amendment).