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26 U.S.C. § 7454 — Burden of proof in fraud, foundation manager, and transferee cases
Federal law — U.S. Code and appendices · legal_authorities
**(a) Fraud** In any proceeding involving the issue whether the petitioner has been guilty of fraud with intent to evade tax, the burden of proof in respect of such issue shall be upon the Secretary.
**(b) Foundation managers** In any proceeding involving the issue whether a foundation manager (as defined in section 4946(b)) has “knowingly” participated in an act of self-dealing (within the meaning of section 4941), participated in an investment which jeopardizes the carrying out of exempt purposes (within the meaning of section 4944), or agreed to the making of a taxable expenditure (within the meaning of section 4945), or whether the trustee of a trust described in section 501(c)(21) has “knowingly” participated in an act of self-dealing (within the meaning of section 4951) or agreed to the making of a taxable expenditure (within the meaning of section 4952), or whether an organization manager (as defined in section 4955(f)(2)) has “knowingly” agreed to the making of a political expenditure (within the meaning of section 4955), or whether an organization manager (as defined in section 4912(d)(2)) has “knowingly” agreed to the making of disqualifying lobbying expenditures within the meaning of section 4912(b), or whether an organization manager (as defined in section 4958(f)(2)) has “knowingly” participated in an excess benefit transaction (as defined in section 4958(c)), the burden of proof in respect of such issue shall be upon the Secretary.
**(c) Cross reference** For provisions relating to burden of proof as to transferee liability, see section 6902(a).
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Source file: Laws/federal/codes/united-states-code/title-26/section-7454-burden-of-proof-in-fraud-foundation-manager-and-transferee-cases--1f233e4158.md
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Source location: Title 26, Chapter 76, § 7454; chapter-076-judicial-proceedings.md
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**(a) Fraud** In any proceeding involving the issue whether the petitioner has been guilty of fraud with intent to evade tax, the burden of proof in respect of such issue shall be upon the Secretary.
**(b) Foundation managers** In any proceeding involving the issue whether a foundation manager (as defined in section 4946(b)) has “knowingly” participated in an act of self-dealing (within the meaning of section 4941), participated in an investment which jeopardizes the carrying out of exempt purposes (within the meaning of section 4944), or agreed to the making of a taxable expenditure (within the meaning of section 4945), or whether the trustee of a trust described in section 501(c)(21) has “knowingly” participated in an act of self-dealing (within the meaning of section 4951) or agreed to the making of a taxable expenditure (within the meaning of section 4952), or whether an organization manager (as defined in section 4955(f)(2)) has “knowingly” agreed to the making of a political expenditure (within the meaning of section 4955), or whether an organization manager (as defined in section 4912(d)(2)) has “knowingly” agreed to the making of disqualifying lobbying expenditures within the meaning of section 4912(b), or whether an organization manager (as defined in section 4958(f)(2)) has “knowingly” participated in an excess benefit transaction (as defined in section 4958(c)), the burden of proof in respect of such issue shall be upon the Secretary.
**(c) Cross reference** For provisions relating to burden of proof as to transferee liability, see section 6902(a).
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Allowance of deduction** There is allowed as a deduction for the taxable year an amount equal to the sum of the amounts contributed by the taxpayer during the taxable year to or under a trust or trusts described in section 501(c)(21).
**(b) Limitation** The maximum amount of the deduction allowed by subsection (a) for any taxpayer for any taxable year shall not exceed the greater of—
(1) the amount necessary to fund (with level funding) the remaining unfunded liability of the taxpayer for black lung claims filed (or expected to be filed) by (or with respect to) past or present employees of the taxpayer, or
(2) the aggregate amount necessary to increase each trust described in section 501(c)(21) to the amount required to pay all amounts payable out of such trust for the taxable year.
**(c) Special rules**
(1) **Method of determining amounts referred to in subsection (b)**
(A) *In general* — The amounts described in subsection (b) shall be determined by using reasonable actuarial methods and assumptions which are not inconsistent with regulations prescribed by the Secretary.
(B) *Funding period* — Except as provided in subparagraph (C), the funding period for purposes of subsection (b)(1) shall be the greater of—
(i) the average remaining working life of miners who are present employees of the taxpayer, or
(ii) 10 taxable years.
For purposes of the preceding sentence, the term “miner” has the same meaning as such term has when used in section 402(d) of the Black Lung Benefits Act ([30 U.S.C. 902(d)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title30-section902/d&num=0&edition=prelim)).
(C) *Different funding periods* — To the extent that—
(i) regulations prescribed by the Secretary provide for a different period, or
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Tax-exempt foundations** There is hereby imposed on each private foundation which is exempt from taxation under section 501(a) for the taxable year, with respect to the carrying on of its activities, a tax equal to 1.39 percent of the net investment income of such foundation for the taxable year.
**(b) Taxable foundations** There is hereby imposed on each private foundation which is not exempt from taxation under section 501(a) for the taxable year, with respect to the carrying on of its activities, a tax equal to—
(1) the amount (if any) by which the sum of (A) the tax imposed under subsection (a) (computed as if such subsection applied to such private foundation for the taxable year), plus (B) the amount of the tax which would have been imposed under section 511 for the taxable year if such private foundation had been exempt from taxation under section 501(a), exceeds
(2) the tax imposed under subtitle A on such private foundation for the taxable year.
**(c) Net investment income defined**
(1) **In general** — For purposes of subsection (a), the net investment income is the amount by which (A) the sum of the gross investment income and the capital gain net income exceeds (B) the deductions allowed by paragraph (3). Except to the extent inconsistent with the provisions of this section, net investment income shall be determined under the principles of subtitle A.
(2) **Gross investment income** — For purposes of paragraph (1), the term “gross investment income” means the gross amount of income from interest, dividends, rents, payments with respect to securities loans (as defined in section 512(a)(5)), and royalties, but not including any such income to the extent included in computing the tax imposed by section 511. Such term shall also include income from s
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial taxes**
(1) **On the organization** — There is hereby imposed on each political expenditure by a section 501(c)(3) organization a tax equal to 10 percent of the amount thereof. The tax imposed by this paragraph shall be paid by the organization.
(2) **On the management** — There is hereby imposed on the agreement of any organization manager to the making of any expenditure, knowing that it is a political expenditure, a tax equal to 2½ percent of the amount thereof, unless such agreement is not willful and is due to reasonable cause. The tax imposed by this paragraph shall be paid by any organization manager who agreed to the making of the expenditure.
**(b) Additional taxes**
(1) **On the organization** — In any case in which an initial tax is imposed by subsection (a)(1) on a political expenditure and such expenditure is not corrected within the taxable period, there is hereby imposed a tax equal to 100 percent of the amount of the expenditure. The tax imposed by this paragraph shall be paid by the organization.
(2) **On the management** — In any case in which an additional tax is imposed by paragraph (1), if an organization manager refused to agree to part or all of the correction, there is hereby imposed a tax equal to 50 percent of the amount of the political expenditure. The tax imposed by this paragraph shall be paid by any organization manager who refused to agree to part or all of the correction.
**(c) Special rules** For purposes of subsections (a) and (b)—
(1) **Joint and several liability** — If more than 1 person is liable under subsection (a)(2) or (b)(2) with respect to the making of a political expenditure, all such persons shall be jointly and severally liable under such subsection with respect to such expenditure.
(2) **Limit for m
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Tax on organization** If an organization to which this section applies is not described in section 501(c)(3) for any taxable year by reason of making lobbying expenditures, there is hereby imposed a tax on the lobbying expenditures of such organization for such taxable year equal to 5 percent of the amount of such expenditures. The tax imposed by this subsection shall be paid by the organization.
**(b) On management** If tax is imposed under subsection (a) on the lobbying expenditures of any organization, there is hereby imposed on the agreement of any organization manager to the making of any such expenditures, knowing that such expenditures are likely to result in the organization not being described in section 501(c)(3), a tax equal to 5 percent of the amount of such expenditures, unless such agreement is not willful and is due to reasonable cause. The tax imposed by this subsection shall be paid by any manager who agreed to the making of the expenditures.
**(c) Organizations to which section applies**
(1) **In general** — Except as provided in paragraph (2), this section shall apply to any organization which was exempt (or was determined by the Secretary to be exempt) from taxation under section 501(a) by reason of being an organization described in section 501(c)(3).
(2) **Exceptions** — This section shall not apply to any organization—
(A) to which an election under section 501(h) applies,
(B) which is a disqualified organization (within the meaning of section 501(h)(5)), or
(C) which is a private foundation.
**(d) Definitions**
(1) **Lobbying expenditures** — The term “lobbying expenditure” means any amount paid or incurred by the organization in carrying on propaganda, or otherwise attempting to influence legislation.
(2) **Organization man
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Federal law — U.S. Code and appendices · legal_authorities
Page 3919
TITLE 26—INTERNAL REVENUE CODE
§ 7454
or his delegate in the same manner before the
Tax Court as he has heretofore been represented
in proceedings before such Court. The taxpayer
shall continue to be represented in accordance
with the rules of practice prescribed by the
Court. No qualified person shall be denied ad-
mission to practice before the Tax Court be-
cause of his failure to be a member of any pro-
fession or calling.
(Aug. 16, 1954, ch. 736, 68A Stat. 884; Pub. L.
86–368, § 2(a), Sept. 22, 1959, 73 Stat. 648; Pub. L.
94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90
Stat. 1834.)
Editorial Notes
AMENDMENTS
1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after
‘‘Secretary’’.
1959—Pub. L. 86–368 substituted ‘‘Chief Counsel for
the Internal Revenue Service or his delegate’’ for ‘‘As-
sistant General Counsel of the Treasury Department
serving as Chief Counsel of the Internal Revenue Serv-
ice, or the delegate of such Chief Counsel,’’.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1959 AMENDMENT
Amendment by Pub. L. 86–368 effective when Chief
Counsel for Internal Revenue Service first appointed
pursuant to amendment of section 7801 of this title by
Pub. L. 86–368 qualifies and takes office, see section 3 of
Pub. L. 86–368, set out as a note under section 7801 of
this title.
§ 7453. Rules of practice, procedure, and evi-
dence
Except in the case of proceedings conducted
under section 7436(c) or 7463, the proceedings of
the Tax Court and its divisions shall be con-
ducted in accordance with such rules of practice
and procedure (other than rules of evidence) as
the Tax Court may prescribe and in accordance
with the Federal Rules of Evidence.
(Aug. 16, 1954, ch. 736, 68A Stat. 884; Pub. L.
91–172, title IX, §
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 7454
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