Clint L. Martin and Jenifer Martin v. Commissioner of Internal Revenue, T.C. Memo. 2026-40 Stephen Martin and Amanda Martin v. Commissioner of Internal Revenue, T.C. Memo. 2026-39, May 14, 2026

The cases of Martin v. Commissioner center on a pair of cousins, Clint and Stephen Martin, who jointly owned a parcel of land and attempted to donate it to a local municipality. In 2014, Clint Martin successfully bid $22,000 to purchase 13.33 acres of property located in Highland City, Utah. He funded the purchase through Litefoot Investments, LLC, a Utah limited liability company whose members consisted of himself and his cousin, Stephen. In 2016, Clint executed a warranty deed that formally transferred the property into the joint ownership of himself and Stephen.

In 2018, the cousins resolved to donate the property to Highland City. On November 21, 2018, they sent a letter to the mayor and City Council offering the donation. The Highland City Council subsequently voted to accept the property on December 4, 2018. Following this approval, Clint, Stephen, and the mayor of Highland City signed a "Joint Letter" on December 21, 2018. The Joint Letter indicated that the Martins offered "a donation of land" for "[t]he purpose of . . . a conservation contribution" and established an intent for the city "to maintain th[e] property in perpetuity as preserved open space". Furthermore, the letter declared that the property "will be donated" with "all taxes paid and current through the end of 2018" and "all costs associated with said donation . . . paid by the donors".

On December 27, 2018, Clint and Stephen executed a warranty deed conveying the property to Highland City, which was formally recorded alongside the Joint Letter the next day. Crucially, the 2018 deed contained boilerplate language stating that the property was conveyed "for and in consideration of the sum of Ten and no/100 Dollars ($10.00), and other good and valuable consideration in hand paid by" Highland City.

For the 2018 tax year, the property was appraised by Todd Gurney at a valuation of $665,000. On their respective 2018 joint income tax returns, both Clint and Stephen claimed massive charitable contribution deductions—Clint claiming $339,400 (with $332,500 attributable to his 50% interest) and Stephen claiming $332,500 for his 50% interest. Both taxpayers attached Form 8283, Noncash Charitable Contributions, signed by the appraiser, the donors, and the Highland City Administrator, listing their respective bases in the property as $35,000.

The Taxpayers' Request for Relief

Upon examination, the Internal Revenue Service (IRS) issued Notices of Deficiency disallowing the charitable contribution deductions for the property and assessing accuracy-related penalties under Internal Revenue Code (IRC) section 6662(a). The taxpayers timely petitioned the United States Tax Court for relief, challenging the IRS's disallowance of their deductions.

The IRS subsequently filed Motions for Summary Judgment and Partial Summary Judgment, respectively, arguing that the petitioners were not entitled to the deductions as a matter of law. The IRS contended that the taxpayers fatally failed to (1) obtain a valid Contemporaneous Written Acknowledgment (CWA), (2) obtain a qualified appraisal, and (3) attach a complete and correct appraisal summary to their returns. The Court determined that if the taxpayers failed to obtain a satisfactory CWA, the deduction would be denied in full without needing to evaluate the appraisal requirements.

The Court's Analysis of the Applicable Law

For tax professionals, the substantiation requirements of IRC section 170(f)(8) are a familiar, yet unforgiving, compliance hurdle. Section 170(f)(8)(A) dictates that a charitable contribution of $250 or more must be substantiated "by a [CWA] of the contribution by the donee organization".

Under section 170(f)(8)(B), this acknowledgment must include:

The amount of cash and a description (but not value) of any property other than cash contributed;
Whether the donee organization provided any goods or services in consideration, in whole or in part, for any property contributed; and
A description and good faith estimate of the value of any goods or services provided by the donee organization.

The Tax Court strongly emphasized the rigidity of these rules. Citing previous jurisprudence, the Court noted, "The requirements of a CWA are strict" (Izen v. Commissioner, 148 T.C. 71, 76–77 (2017), aff’d per curiam, 38 F.4th 459 (5th Cir. 2022)). The Court highlighted the fundamental purpose behind this rigidity: "The deterrence value of section 170(f)(8)’s total denial of a deduction comports with the effective administration of a self-assessment and self-reporting system" (Addis v. Commissioner, 374 F.3d 881, 887 (9th Cir. 2004)).

Most importantly for practitioners, the Court reiterated that equity and good faith cannot save a defective CWA. The Court firmly stated, "[t]he doctrine of substantial compliance does not apply to excuse the failure to obtain a CWA meeting the statutory requirements" (Izen, 148 T.C. at 77).

However, the Court did acknowledge that the statute does not mandate a specific IRS form or format for a CWA. A valid CWA may be "made up of a series of documents" (Irby v. Commissioner, 139 T.C. 371, 388–89 (2012)). Relying on this flexibility, the taxpayers argued that their Form 8283, the Joint Letter, the 2018 deed, and (in Stephen's case) the city council agenda, taken together, satisfied the statutory requirements.

Application of the Law to the Facts

The Court evaluated whether the aggregate collection of documents proffered by the taxpayers satisfied the strict parameters of section 170(f)(8).

While the Court easily concluded that the Joint Letter and the 2018 deed sufficiently satisfied the property description requirement of section 170(f)(8)(B)(i) (Averyt v. Commissioner, T.C. Memo. 2012-198), the taxpayers stumbled on the requirement to disclose donee consideration.

Under section 170(f)(8)(B)(ii), a CWA must state whether the donee provided any consideration for the contribution. The Court stressed that precedent demands an explicit, affirmative statement to this effect, even if the donee provided absolutely no consideration (Irby; IQ Holdings, Inc. v. Commissioner, T.C. Memo. 2024-104; Schrimsher v. Commissioner, T.C. Memo. 2011-71; Friedman v. Commissioner, T.C. Memo. 2010-45). The Court then dismantled the taxpayers' documents one by one:

Form 8283

The Court rejected the Form 8283 as satisfying the consideration requirement because "it does not include a statement that the donee provided no consideration for the donation" (Cade v. Commissioner, T.C. Memo. 2025-20; Boone Operations Co. v. Commissioner, T.C. Memo. 2013-101).

The Joint Letter

Although the Joint Letter characterized the transfer as a "donation" and a "gift," the Court found it legally insufficient. It did not explicitly declare that Highland City provided no consideration in exchange, and "it is silent as to what obligations, if any, the city undertook to 'maintain' the property" (IQ Holdings, Inc.). The Court stated, "The express terms of the statute require an affirmative statement" (Durden v. Commissioner, T.C. Memo. 2012-140). The mere use of charitable terminology is an inadequate substitute. As cited by the Court, "the word 'donation' is consistent with a gratuitous transfer that is nonetheless reciprocated to some extent by the donee" (IQ Holdings, Inc.), and use of the word donation does not "necessarily impl[y] that there was no consideration given" (Brooks v. Commissioner, T.C. Memo. 2022-122; Campbell v. Commissioner, T.C. Memo. 2020-41).

The 2018 Deed

The deed of gift was equally fatal to the taxpayers' position. Applying the affirmative statement requirement to deeds, the Court noted it looks for an "affirmative indication" that no consideration was provided, primarily by determining whether the deed contains a merger clause (310 Retail, LLC v. Commissioner, T.C. Memo. 2017-164). Because the 2018 deed explicitly recited that the city provided "$10.00, and other good and valuable consideration," and lacked a merger clause, it failed the test (Big River Dev., L.P. v. Commissioner, T.C. Memo. 2017-166; Brooks).

The taxpayers attempted to rely on Utah state law to argue that the Joint Letter and deed formed a complete agreement with the operative effect of a merger clause. The Court sharply rejected this maneuver, noting that reading a merger clause into a deed to satisfy federal substantiation requirements is contradictory to the statute's express terms. Quoting Durden, the Court explained: "Nothing in the statute . . . requires [the IRS] to look beyond the written acknowledgment when on its face the acknowledgment fails to provide the information required to substantiate a charitable contribution deduction". The Court concluded that "[i]gnoring or reworking statements in deeds to create a valid CWA risks introducing the doctrine of substantial compliance into a statute where it does not belong".

The City Council Agenda

In Stephen Martin's case, the taxpayer also pointed to a City Council Agenda stating there would be "no expenditure to Highland City to accept the donation". The Court summarily dismissed this, reasoning that because the agenda preceded the council's vote to accept the property, the city could not conceptually provide an acknowledgment for something it had yet to receive (Bruce v. Commissioner, T.C. Memo. 2011-153). Furthermore, the agenda report could not override the contradictory boilerplate text within the formal 2018 deed.

Conclusions of the Court

The Tax Court concluded that there was no genuine dispute of material fact regarding the documentation the petitioners provided as their CWA. Interpreting the plain language of the documents, the Court ruled as a matter of law that "their plain words do not constitute a valid CWA" (J.R. Simplot v. Chevron Pipeline Co., 563 F.3d 1102, 1111 (10th Cir. 2009)).

Because the documents failed to state whether Highland City provided consideration, the IRS could not estimate the value of any consideration provided, fundamentally failing IRC section 170(f)(8)(B)(ii) and (iii). The Court reiterated the uncompromising penalty for this failure: "Failure to comply strictly with the CWA requirements results in the disallowance of the entire deduction. See § 170(f)(8)(A) ('No deduction shall be allowed . . . unless the taxpayer substantiates the contribution by a [CWA] . . . .'); Izen, 148 T.C. at 77".

Consequently, the Court granted summary judgment in favor of the Commissioner, entirely disallowing the massive noncash charitable contribution deductions for both Clint and Stephen Martin, leaving only the determination of accuracy-related penalties for trial. For CPAs and EAs, the Martin cases serve as a stark reminder: boilerplate legal language in deeds (such as reciting nominal consideration) can outright destroy a charitable deduction if not cured by a perfectly drafted, contemporaneous written acknowledgment containing explicit, affirmative statements confirming the total absence of donee consideration. Substantial compliance will never rescue a taxpayer from a defective CWA.

Prepared with assistance from NotebookLM.