The U.S. Supreme Court case Hernandez v. Commissioner of Internal Revenue in 1988 revolved around the issue of whether payments made for "auditing" and "training" services to the Church of Scientology could be considered charitable contributions, and thus tax-deductible under section 170 of the Internal Revenue Code. The petitioner, a member of the church, argued that these payments were donations since they were required as part of his religious practice. However, both lower courts ruled against him stating that these payments were not voluntary but rather quid pro quo transactions where he received significant benefits in return (spiritual guidance). The Supreme Court affirmed this decision by a vote of five to four; it held that because auditing and training sessions are not different from other commercial transactions - where one pays for receiving goods or services - such payments cannot qualify as charitable contributions even if they hold religious significance for payers.

In the dissenting opinion for Hernandez v. Commissioner of Internal Revenue, Justice Blackmun argued that payments made by members of the Church of Scientology should be considered charitable contributions and therefore tax-deductible. He disagreed with the majority's interpretation that these payments were more akin to a quid pro quo transaction rather than donations because they received spiritual services in return. Blackmun contended that this reasoning could potentially apply to other religious organizations where members make contributions and receive spiritual benefits, thus threatening their tax-exempt status as well. Furthermore, he criticized the majority for not adequately considering previous court rulings which had allowed deductions for similar transactions within different religious contexts.