Based on our research, you can deduct most of the fines you paid to the Slammin-Jammin Club as a charitable contribution since they are in the nature of gifts per Duberstein, a 1960 Supreme Court decision. In this judicial case, the taxpayer received a Cadillac in return for periodically giving names of potential customers to a business associate. The Supreme Court held that the Cadillacs value was gross income to the taxpayer since the donors intent to make a gift was the key factor establishing the transfer as a gift. Similarly, you intended to make a gift to the American Red Cross. You voluntarily joined the club and were aware from the beginning that the bulk of fines you paid would benefit the American Red Cross. Thus, you are entitled to a deduction.