UPPER ARLINGTON, Ohio
The battered house on Sherwin Road was put to good use before the fire department burned it to the ground. SWAT teams barged through the front door in an exercise on dealing with domestic violence. Rescue crews scattered mannequins around the house and blew smoke through the halls to simulate a meth lab explosion. Firefighters set fires in one room after another and practiced putting them out. Then, in one last drill, they torched the whole place.
Five years later, though, a dispute still smolders over the homeowner's attempt to claim a $287,000 charitable tax deduction for donating the house to the fire department, which has burned down at least 32 such homes in Upper Arlington since 1988.
The Internal Revenue Service is trying to stop homeowners from claiming such deductions.
Lured by the prospect of free demolition, homeowners around the country sometimes offer their houses to the local fire department for training purposes. The department burns down the house, clearing the way for the owner to build a bigger and better home.
In court cases in Ohio and Wisconsin, the IRS is arguing that because such houses are already slated for demolition, donating them for fire training isn't an act of charity.
The dispute adds a new element of controversy to the decades-old debate over whether the risks associated with "live burns" - in which more than a dozen firefighters have been killed in the past two decades - outweigh the training benefits.
Fire chiefs say live burns supply invaluable training for volunteer departments, which make up the bulk of the nation's firefighters. Some fear that the tax disputes will discourage donors from coming forward.
Nobody tracks the number of live burns each year, but fire officials say they are increasingly rare because of mounting safety and environmental restrictions and because fewer homes are up for demolition in the slumping economy.
"We need to keep our skills current. Those opportunities are going to become fewer and farther between," said Fire Chief Mitch Ross in Upper Arlington, the wealthy Columbus suburb where the Sherwin Road home owned by James Hendrix burned down in 2004.
Churches, corporations and cities with vacant properties also donate buildings for fire training. Sometimes it is a dilapidated old barn, other times a sprawling suburban house. (The Hendrix home, not including the land, was appraised at $287,400).
It's impossible to know exactly how many people have tried to claim such deductions; the IRS would not comment.
Steven Willis, a professor at the University of Florida who studies income tax law, said a charitable deduction can be no greater than the value of whatever was donated, and a house given to a fire department has negative value, since the owner otherwise would have to pay somebody to get rid of it.
"The whole idea of a charitable deduction is that you give something to charity and you don't get anything back, right?" said Paul Caron, a tax scholar at the University of Cincinnati. "When you give $100 to the Catholic Church, you don't get anything for that $100."
The IRS maintains in court papers in a case in Wisconsin that the homeowners do not qualify for a deduction because they are donating only a "partial interest" in their home, rather than the entire property. The agency also says homeowners are letting firefighters only use the property, not donating it in full.
But a lot of work goes into preparing a house to be burned down, including a detailed inspection by environmental authorities, said Terry Grady, a lawyer representing Mr. Hendrix, who wants the IRS to refund him $100,590 in "erroneously collected" taxes after Mr. Hendrix built a new house on the property.
"They have to, in fact, pay their mortgage off. They have to make sure there's no asbestos in the house," Mr. Grady said. "And you know, conversely, the benefits to the fire department are just immense."
Although the demolition is free, the homeowner is responsible for clearing away the debris.
ESPN commentator Kirk Herbstreit, who also lives in Upper Arlington, let firefighters burn his home in 2004. The former Ohio State football star's claim of a $330,000 tax deduction was rejected a year later. Mr. Herbstreit declined to comment.
A case similar to the Hendrix dispute has also unfolded in Chenequa, Wis., where Theodore Rolfs filed for a $76,000 tax deduction on his lakefront home that was burned in 1998. The trial concluded in 2006; Mr. Rolfs is still waiting for a verdict.
Mr. Rolfs, who had been told it was common practice to receive the deduction, was taken aback when the IRS rejected his request.
"Their arguments didn't make any sense," he said.
At Mr. Rolfs' house, firefighters wheeled a truck down to the shore and practiced pumping lake water onto the flames, a crucial training exercise in Chenequa, which has no fire hydrants, said Mr. Rolfs' attorney, Michael Goller.
Environmental laws in some states ban live burns. In other states, most fire departments adhere to safety guidelines that say windows should be boarded up, floors inspected for sturdiness and shingles and carpets stripped away.