In a tax proceeding, the Commissioner argues that defendant should be disallowed a charitable deduction for donating several artifacts containing eagle parts to a museum because it will frustrate the purpose behind the BGEPA. The court disagrees, finding it unlikely that such an allowance will encourage others to procure eagle artifacts for the sole purpose of obtaining a tax deduction. Further, the court disagrees with the Commissioner that Sammons acquired illegal title to the artifacts, finding Sammons had sufficient ownership interest in the eagle artifacts for donation. For further discussion on commerce in eagle parts under the BGEPA, see Detailed Discussion of Eagle Act.
THE EAGLE ARTIFACTS
The Commissioner contends the Sammons should be disallowed a deduction for the Eagle Artifacts. These artifacts consisted of thirty-five items that incorporated feathers, claws, or other parts of birds protected under the Bald Eagle Protection Act, 16 U.S.C. §§ 668-668d, the Migratory Bird Treaty Act, 16 U.S.C. §§ 703-711, and the Endangered Species Act, 16 U.S.C. §§ 1531-1543. First, the Commissioner argues that relevant federal statutes prohibited the Sammons from obtaining title to the Eagle Artifacts. Second, even if the Sammons had title to the Eagle Artifacts, the Commissioner contends that allowing a deduction for contribution of these items to the museum will frustrate public policy. The Tax Court rejected both of these arguments. So do we.
A. Title to the Eagle Artifacts
The Eagle Protection Act makes it a federal crime to
take, possess, sell, purchase, barter, offer to sell, purchase or barter, transport, export or import, at any time or in any manner, any bald eagle commonly known as the American eagle, or any golden eagle, alive or dead, or any part, nest, or egg thereof....
16 U.S.C. § 668(a). Similarly, the Migratory Bird Treaty Act provides that
it shall be unlawful at any time, by any means or in any manner, to pursue, hunt, take, capture, kill, attempt to take, capture, or kill, possess, offer for sale, sell, offer to barter, barter, offer to purchase, purchase, deliver for shipment, ship, export, import, cause to be shipped, exported, or imported, delivered for transportation, transport or cause to be transported, carry or cause to be carried, or receive for shipment, transportation, carriage, or export, any migratory bird, any part, nest, or egg of any such bird, or any product, whether or not manufactured, which consists, or is composed in whole or in part, of any such bird or any part, nest, or egg thereof....
16 U.S.C. § 703.
It appears the Sammons may have violated federal law when they purchased the Eagle Artifacts. But it does not follow that the Sammons did not have title to the Eagle Artifacts when they made their contribution. From the statutes we discern only that a violation can result in criminal or civil sanctions, including forfeiture of protected items. See 16 U.S.C. § 668(a)-(b) (Eagle Protection Act); 16 U.S.C. § 707 (Migratory Bird Treaty Act); Sammons v. Commissioner, 51 T.C.M. (CCH) 1568, 1574 (1986).
The Commissioner argues "that where a statute expressly forbids or penalizes a person from entering into a certain kind of contract, the contract itself is void." (citing S. Williston, A Treatise on the Law of Contracts § 1763 (3d ed. 1972)). The Commissioner's reliance on Williston is misplaced. Professor Williston does not suggest that a third party may have a court declare an illegal contract void. Rather, if a statute prohibits an agreement or sale, the result is "that the courts will not lend their aid to any attempted enforcement of the agreement by the parties." Id. § 1763, at 203. This rule is echoed by other commentators. See, e.g., Restatement (Second) of Contracts ch. 8, Topic 1 introductory note ("This Restatement is concerned with whether a promise is enforceable and not with whether some other sanction has been attached to the act of making or performing it in such a way as to make that act 'illegal.' "); J. Calamari & J. Perillo, The Law of Contracts § 22- 5, at 785 (2d ed. 1977) ("Where performance has been entered upon under an illegal bargain the general rule is that the court will leave the parties where it finds them.").
The Commissioner also relies on In re Pajarito American Indian Art, Inc., 7 B.R. 343 (Bankr.D.Ariz.1980), to support the argument that the Sammons did not have title to the Eagle Artifacts. In Pajarito, the bankruptcy court faced conflicting ownership claims to a Sioux Indian ghost dance shield, an artifact that incorporated eagle feathers on its face. Id. at 344. The bankruptcy court concluded that the Eagle Protection and Migratory Bird Treaty Acts made the contract between the claimants illegal, and it refused to enforce the contract. In contrast, the case now before us does not involve an ownership dispute between the parties to an illegal contract. Rather, the Commissioner is contending that because the Sammons' purchase of the Eagle Artifacts violated federal law, subjecting the artifacts to forfeiture, the Sammons' claim of title was so flawed that they owned nothing and hence could contribute nothing to the museum. We disagree. The Sammons may have made an illegal contract when they bought the Eagle Artifacts, but no one is seeking, or defending, enforcement of the contract of purchase or the subsequent gift. The government might have instituted a proceeding seeking forfeiture of the Eagle Artifacts under the Eagle Protection Act, 16 U.S.C. § 668b(b), or the Endangered Species Act, 16 U.S.C. § 1540(e)(4)(A), but it has not done so. We conclude that the Sammons had a sufficient ownership interest in the Eagle Artifacts to contribute them to the museum.
B. Public Policy
The Commissioner next contends the Sammons should be denied any deduction for their contribution of the Eagle Artifacts on the ground of public policy. The Commissioner argues that federal law makes it illegal to acquire or possess the Eagle Artifacts. To allow the Sammons a deduction for donating the artifacts to the museum would encourage a violation of federal law by subsidizing, through tax benefits flowing from the donation, an illegal transaction. We find this argument unpersuasive in the context of this case.
Income tax deductions "are a matter of grace and Congress can ... disallow them as it chooses." Commissioner v. Sullivan, 356 U.S. 27, 28, 78 S.Ct. 512, 514, 2 L.Ed.2d 559 (1958). "[W]here Congress has been wholly silent, [the Court has upheld a disallowance] ... [o]nly where the allowance of [the] deduction would 'frustrate sharply defined national or state policies proscribing particular types of conduct'...." Commissioner v. Tellier, 383 U.S. 687, 693-94, 86 S.Ct. 1118, 1121-22, 16 L.Ed.2d 185 (1966) (citing Commissioner v. Heininger, 320 U.S. 467, 473, 64 S.Ct. 249, 253, 88 L.Ed. 171 (1943)). "Further, the 'policies frustrated must be national or state policies evidenced by some governmental declaration of them.' Finally, the 'test of nondeductibility always is the severity and immediacy of the frustration resulting from allowance of the deduction.' " Tellier, 383 U.S. at 694, 86 S.Ct. at 1122 (citations and emphasis omitted).
The Supreme Court has emphasized the high priority Congress has assigned to the policy of protecting endangered wildlife species such as the Eagle Artifacts involved in this case. See, e.g., United States v. Dion, 476 U.S. 734, 106 S.Ct. 2216, 90 L.Ed.2d 967 (1986) (Eagle Protection Act abrogates treaty rights of Indians); Andrus v. Allard, 444 U.S. 51, 100 S.Ct. 318, 62 L.Ed.2d 210 (1979) (upholding provisions of the Eagle Protection Act and the Migratory Bird Treaty Act against fifth amendment takings clause challenge). In this case, however, there has been no showing that allowing a deduction for the Sammons' contribution of the Eagle Artifacts to the museum would severely or immediately frustrate national or state policy. No evidence was presented tending to prove that allowance of the deduction would encourage the killing or acquisition of protected bird species. It may be true that persons who presently own artifacts of this nature might be encouraged to donate the items to museums so that they could claim a deduction on their tax returns, but we do not view this as a threat to the national policy of protecting endangered bird species. Nor do we find anything in the record to suggest that by permitting a deduction for the contribution of the Eagle Artifacts, unscrupulous sellers of Indian art are likely to hunt, capture and kill protected eagle species in an effort to manufacture "ancient" artifacts that can be sold to collectors, unsuspecting or not, for spurious donations to charitable organizations. We conclude that public policy does not prevent the Sammons from claiming a deduction for donating the Eagle Artifacts to the museum.