Browse Arkansas Code titles and sections
26 U.S.C. § 4961 — Abatement of second tier taxes where there is correction
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** If any taxable event is corrected during the correction period for such event, then any second tier tax imposed with respect to such event (including interest, additions to the tax, and additional amounts) shall not be assessed, and if assessed the assessment shall be abated, and if collected shall be credited or refunded as an overpayment.
**(b) Supplemental proceeding** If the determination by a court that the taxpayer is liable for a second tier tax has become final, such court shall have jurisdiction to conduct any necessary supplemental proceeding to determine whether the taxable event was corrected during the correction period. Such a supplemental proceeding may be begun only during the period which ends on the 90th day after the last day of the correction period. Where such a supplemental proceeding has begun, the reference in the second sentence of section 6213(a) to a final decision of the Tax Court shall be treated as including a final decision in such supplemental proceeding.
**(c) Suspension of period of collection for second tier tax**
(1) **Proceeding in District Court or United States Court of Federal Claims** — If, not later than 90 days after the day on which the second tier tax is assessed, the first tier tax is paid in full and a claim for refund of the amount so paid is filed, no levy or proceeding in court for the collection of the second tier tax shall be made, begun, or prosecuted until a final resolution of a proceeding begun as provided in paragraph (2) (and of any supplemental proceeding with respect thereto under subsection (b)). Notwithstanding section 7421(a), the collection by levy or proceeding may be enjoined during the time such prohibition is in force by a proceeding in the proper court.
(2) **Suit must be broug
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4961
Stored review status: release_metadata_unconfirmed. A text match is a research starting point; applicability is not established.
Original supplied file — preserved unchanged
Download original Markdown file
File SHA-256: 78cac59fecab14de31d099fd5c0e986b03d0ec1a31667ca69da321bc84ca779d. The original may include catalog metadata, neighboring provisions, or embedded records outside this collection's scope. Search shows only the selected federal record. Historical editions and unverified snapshots are not a statement of current law.
Authority boundary: historical or unconfirmed source not current law verified.
Open the recorded source website ↗
Record provenance
Stable record: federal_law:legal_authorities:record_usc_9e6d2cc86420a22de92e9e2c
Source file: Laws/federal/codes/united-states-code/title-26/section-4961-abatement-of-second-tier-taxes-where-there-is-correction--fe1d99767e.md
Pages: Not recorded – Not recorded
Passage SHA-256: 4e98c26ac4c9e567948f3a776e9a6d1a4b13f9534bac7d0de9f4141e0308e98e
Source location: Title 26, Chapter 42, § 4961; chapter-042-private-foundations-and-certain-other-tax-exempt-organizations.md
Stored source content
**(a) General rule** If any taxable event is corrected during the correction period for such event, then any second tier tax imposed with respect to such event (including interest, additions to the tax, and additional amounts) shall not be assessed, and if assessed the assessment shall be abated, and if collected shall be credited or refunded as an overpayment.
**(b) Supplemental proceeding** If the determination by a court that the taxpayer is liable for a second tier tax has become final, such court shall have jurisdiction to conduct any necessary supplemental proceeding to determine whether the taxable event was corrected during the correction period. Such a supplemental proceeding may be begun only during the period which ends on the 90th day after the last day of the correction period. Where such a supplemental proceeding has begun, the reference in the second sentence of section 6213(a) to a final decision of the Tax Court shall be treated as including a final decision in such supplemental proceeding.
**(c) Suspension of period of collection for second tier tax**
(1) **Proceeding in District Court or United States Court of Federal Claims** — If, not later than 90 days after the day on which the second tier tax is assessed, the first tier tax is paid in full and a claim for refund of the amount so paid is filed, no levy or proceeding in court for the collection of the second tier tax shall be made, begun, or prosecuted until a final resolution of a proceeding begun as provided in paragraph (2) (and of any supplemental proceeding with respect thereto under subsection (b)). Notwithstanding section 7421(a), the collection by levy or proceeding may be enjoined during the time such prohibition is in force by a proceeding in the proper court.
(2) **Suit must be brought to determine liability** — If, within 90 days after the day on which his claim for refund is denied, the person against whom the second tier tax was assessed fails to begin a proceeding described in section 7422 for the determination of his liability for such tax, paragraph (1) shall cease to apply with respect to such tax, effective on the day following the close of the 90-day period referred to in this paragraph.
(3) **Suspension of running of period of limitations on collection** — The running of the period of limitations provided in section 6502 on the collection by levy or by a proceeding in court with respect to any second tier tax described in paragraph (1) shall be suspended for the period during which the Secretary is prohibited from collecting by levy or a proceeding in court.
(4) **Jeopardy collection** — If the Secretary makes a finding that the collection of the second tier tax is in jeopardy, nothing in this subsection shall prevent the immediate collection of such tax.
Cross-references
Connections may be documented source relationships, shared citations or nearby passages. Each explains its basis; a connection alone does not establish applicability to your situation.
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** If it is established to the satisfaction of the Secretary that—
(1) a taxable event was due to reasonable cause and not to willful neglect, and
(2) such event was corrected within the correction period for such event,
then any qualified first tier tax imposed with respect to such event (including interest) shall not be assessed and, if assessed, the assessment shall be abated and, if collected, shall be credited or refunded as an overpayment.
**(b) Qualified first tier tax** For purposes of this section, the term “qualified first tier tax” means any first tier tax imposed by subchapter A, C, D, or G of this chapter, except that such term shall not include the tax imposed by section 4941(a) (relating to initial tax on self-dealing).
**(c) Special rule for tax on political expenditures of section 501(c)(3) organizations** In the case of the tax imposed by section 4955(a), subsection (a)(1) shall be applied by substituting “not willful and flagrant” for “due to reasonable cause and not to willful neglect”.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4962
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial taxes**
(1) **On self-dealer** — There is hereby imposed a tax on each act of self-dealing between a disqualified person and a private foundation. The rate of tax shall be equal to 10 percent of the amount involved with respect to the act of self-dealing for each year (or part thereof) in the taxable period. The tax imposed by this paragraph shall be paid by any disqualified person (other than a foundation manager acting only as such) who participates in the act of self-dealing. In the case of a government official (as defined in section 4946(c)), a tax shall be imposed by this paragraph only if such disqualified person participates in the act of self-dealing knowing that it is such an act.
(2) **On foundation manager** — In any case in which a tax is imposed by paragraph (1), there is hereby imposed on the participation of any foundation manager in an act of self-dealing between a disqualified person and a private foundation, knowing that it is such an act, a tax equal to 5 percent of the amount involved with respect to the act of self-dealing for each year (or part thereof) in the taxable period, unless such participation is not willful and is due to reasonable cause. The tax imposed by this paragraph shall be paid by any foundation manager who participated in the act of self-dealing.
**(b) Additional taxes**
(1) **On self-dealer** — In any case in which an initial tax is imposed by subsection (a)(1) on an act of self-dealing by a disqualified person with a private foundation and the act is not corrected within the taxable period, there is hereby imposed a tax equal to 200 percent of the amount involved. The tax imposed by this paragraph shall be paid by any disqualified person (other than a foundation manager acting only as such) who participated in
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4941
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial tax** There is hereby imposed on the undistributed income of a private foundation for any taxable year, which has not been distributed before the first day of the second (or any succeeding) taxable year following such taxable year (if such first day falls within the taxable period), a tax equal to 30 percent of the amount of such income remaining undistributed at the beginning of such second (or succeeding) taxable year. The tax imposed by this subsection shall not apply to the undistributed income of a private foundation—
(1) for any taxable year for which it is an operating foundation (as defined in subsection (j)(3)), or
(2) to the extent that the foundation failed to distribute any amount solely because of an incorrect valuation of assets under subsection (e), if—
(A) the failure to value the assets properly was not willful and was due to reasonable cause,
(B) such amount is distributed as qualifying distributions (within the meaning of subsection (g)) by the foundation during the allowable distribution period (as defined in subsection (j)(2)),
(C) the foundation notifies the Secretary that such amount has been distributed (within the meaning of subparagraph (B)) to correct such failure, and
(D) such distribution is treated under subsection (h)(2) as made out of the undistributed income for the taxable year for which a tax would (except for this paragraph) have been imposed under this subsection.
**(b) Additional tax** In any case in which an initial tax is imposed under subsection (a) on the undistributed income of a private foundation for any taxable year, if any portion of such income remains undistributed at the close of the taxable period, there is hereby imposed a tax equal to 100 percent of the amount remaining undistributed at su
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4942
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial tax**
(1) **Imposition** — There is hereby imposed on the excess business holdings of any private foundation in a business enterprise during any taxable year which ends during the taxable period a tax equal to 10 percent of the value of such holdings.
(2) **Special rules** — The tax imposed by paragraph (1)—
(A) shall be imposed on the last day of the taxable year, but
(B) with respect to the private foundation’s holdings in any business enterprise, shall be determined as of that day during the taxable year when the foundation’s excess holdings in such enterprise were the greatest.
**(b) Additional tax** In any case in which an initial tax is imposed under subsection (a) with respect to the holdings of a private foundation in any business enterprise, if, at the close of the taxable period with respect to such holdings, the foundation still has excess business holdings in such enterprise, there is hereby imposed a tax equal to 200 percent of such excess business holdings.
**(c) Excess business holdings** For purposes of this section—
(1) **In general** — The term “excess business holdings” means, with respect to the holdings of any private foundation in any business enterprise, the amount of stock or other interest in the enterprise which the foundation would have to dispose of to a person other than a disqualified person in order for the remaining holdings of the foundation in such enterprise to be permitted holdings.
(2) **Permitted holdings in a corporation**
(A) *In general* — The permitted holdings of any private foundation in an incorporated business enterprise are—
(i) 20 percent of the voting stock, reduced by
(ii) the percentage of the voting stock owned by all disqualified persons.
In any case in which all disqualified
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4943
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial taxes**
(1) **On the private foundation** — If a private foundation invests any amount in such a manner as to jeopardize the carrying out of any of its exempt purposes, there is hereby imposed on the making of such investment a tax equal to 10 percent of the amount so invested for each year (or part thereof) in the taxable period. The tax imposed by this paragraph shall be paid by the private foundation.
(2) **On the management** — In any case in which a tax is imposed by paragraph (1), there is hereby imposed on the participation of any foundation manager in the making of the investment, knowing that it is jeopardizing the carrying out of any of the foundation’s exempt purposes, a tax equal to 10 percent of the amount so invested for each year (or part thereof) in the taxable period, unless such participation is not willful and is due to reasonable cause. The tax imposed by this paragraph shall be paid by any foundation manager who participated in the making of the investment.
**(b) Additional taxes**
(1) **On the foundation** — In any case in which an initial tax is imposed by subsection (a)(1) on the making of an investment and such investment is not removed from jeopardy within the taxable period, there is hereby imposed a tax equal to 25 percent of the amount of the investment. The tax imposed by this paragraph shall be paid by the private foundation.
(2) **On the management** — In any case in which an additional tax is imposed by paragraph (1), if a foundation manager refused to agree to part or all of the removal from jeopardy, there is hereby imposed a tax equal to 5 percent of the amount of the investment. The tax imposed by this paragraph shall be paid by any foundation manager who refused to agree to part or all of the removal from jeopardy
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4944
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial taxes**
(1) **On the foundation** — There is hereby imposed on each taxable expenditure (as defined in subsection (d)) a tax equal to 20 percent of the amount thereof. The tax imposed by this paragraph shall be paid by the private foundation.
(2) **On the management** — There is hereby imposed on the agreement of any foundation manager to the making of an expenditure, knowing that it is a taxable expenditure, a tax equal to 5 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 foundation manager who agreed to the making of the expenditure.
**(b) Additional taxes**
(1) **On the foundation** — In any case in which an initial tax is imposed by subsection (a)(1) on a taxable 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 private foundation.
(2) **On the management** — In any case in which an additional tax is imposed by paragraph (1), if a foundation 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 taxable expenditure. The tax imposed by this paragraph shall be paid by any foundation 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 one person is liable under subsection (a)(2) or (b)(2) with respect to the making of a taxable expenditure, all such persons shall be jointly and severally liable under such paragraph with respect to such expenditure.
(2) **Limit for management** — Wit
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4945
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial taxes**
(1) **On self-dealer** — There is hereby imposed a tax on each act of self-dealing between a disqualified person and a trust described in section 501(c)(21). The rate of tax shall be equal to 10 percent of the amount involved with respect to the act of self-dealing for each year (or part thereof) in the taxable period. The tax imposed by this paragraph shall be paid by any disqualified person (other than a trustee acting only as a trustee of the trust) who participates in the act of self-dealing.
(2) **On trustee** — In any case in which a tax is imposed by paragraph (1), there is hereby imposed on the participation of any trustee of such a trust in an act of self-dealing between a disqualified person and the trust, knowing that it is such an act, a tax equal to 2½ percent of the amount involved with respect to the act of self-dealing for each year (or part thereof) in the taxable period, unless such participation is not willful and is due to reasonable cause. The tax imposed by this paragraph shall be paid by any such trustee who participated in the act of self-dealing.
**(b) Additional taxes**
(1) **On self-dealer** — In any case in which an initial tax is imposed by subsection (a)(1) on an act of self-dealing by a disqualified person with a trust described in section 501(c)(21) and in which the act is not corrected within the taxable period, there is hereby imposed a tax equal to 100 percent of the amount involved. The tax imposed by this paragraph shall be paid by any disqualified person (other than a trustee acting only as a trustee of such a trust) who participated in the act of self-dealing.
(2) **On trustee** — In any case in which an additional tax is imposed by paragraph (1), if a trustee of such a trust refused to agree to part or a
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4951
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Tax imposed**
(1) **On the fund** — There is hereby imposed on each taxable expenditure (as defined in subsection (d)) from the assets or income of a trust described in section 501(c)(21) a tax equal to 10 percent of the amount thereof. The tax imposed by this paragraph shall be paid by the trustee out of the assets of the trust.
(2) **On the trustee** — There is hereby imposed on the agreement of any trustee of such a trust to the making of an expenditure, knowing that it is a taxable 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 the trustee who agreed to the making of the expenditure.
**(b) Additional taxes**
(1) **On the fund** — In any case in which an initial tax is imposed by subsection (a)(1) on a taxable 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 trustee out of the assets of the trust.
(2) **On the trustee** — In any case in which an additional tax is imposed by paragraph (1), if a trustee refused to agree to a part or all of the correction, there is hereby imposed a tax equal to 50 percent of the amount of the taxable expenditure. The tax imposed by this paragraph shall be paid by any trustee who refused to agree to part or all of the correction.
**(c) Joint and several liability** For purposes of subsections (a) and (b), if more than one person is liable under subsection (a)(2) or (b)(2) with respect to the making of a taxable expenditure, all such persons shall be jointly and severally liable under such paragraph with respect to such expenditu
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4952
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) First tier tax** For purposes of this subchapter, the term “first tier tax” means any tax imposed by subsection (a) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4966, 4967, 4971, or 4975.
**(b) Second tier tax** For purposes of this subchapter, the term “second tier tax” means any tax imposed by subsection (b) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4971, or 4975.
**(c) Taxable event** For purposes of this subchapter, the term “taxable event” means any act (or failure to act) giving rise to liability for tax under section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4966, 4967, 4971, or 4975.
**(d) Correct** For purposes of this subchapter—
(1) **In general** — Except as provided in paragraph (2), the term “correct” has the same meaning as when used in the section which imposes the second tier tax.
(2) **Special rules** — The term “correct” means—
(A) in the case of the second tier tax imposed by section 4942(b), reducing the amount of the undistributed income to zero,
(B) in the case of the second tier tax imposed by section 4943(b), reducing the amount of the excess business holdings to zero, and
(C) in the case of the second tier tax imposed by section 4944, removing the investment from jeopardy.
**(e) Correction period** For purposes of this subchapter—
(1) **In general** — The term “correction period” means, with respect to any taxable event, the period beginning on the date on which such event occurs and ending 90 days after the date of mailing under section 6212 of a notice of deficiency with respect to the second tier tax imposed on such taxable event, extended by—
(A) any period in which a deficiency cannot be assessed under section 6213(a) (determined without regard to the last sent
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4963
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial tax** If at any time during any taxable year an employer maintains a plan to which section 412 applies, there is hereby imposed for the taxable year a tax equal to—
(1) in the case of a single-employer plan, 10 percent of the aggregate unpaid minimum required contributions for all plan years remaining unpaid as of the end of any plan year ending with or within the taxable year,
(2) in the case of a multiemployer plan, 5 percent of the accumulated funding deficiency determined under section 431 as of the end of any plan year ending with or within the taxable year, and
(3) in the case of a CSEC plan, 10 percent of the CSEC accumulated funding deficiency as of the end of the plan year ending with or within the taxable year.
**(b) Additional tax** If—
(1) a tax is imposed under subsection (a)(1) on any unpaid minimum required contribution and such amount remains unpaid as of the close of the taxable period,
(2) a tax is imposed under subsection (a)(2) on any accumulated funding deficiency and the accumulated funding deficiency is not corrected within the taxable period, or
(3) a tax is imposed under subsection (a)(3) on any CSEC accumulated funding deficiency and the CSEC accumulated funding deficiency is not corrected within the taxable period,
there is hereby imposed a tax equal to 100 percent of the unpaid minimum required contribution, accumulated funding deficiency, or CSEC accumulated funding deficiency, whichever is applicable, to the extent not so paid or corrected.
**(c) Definitions** For purposes of this section—
(1) **Accumulated funding deficiency** — The term “accumulated funding deficiency” has the meaning given to such term by section 431.
(2) **Correct** — The term “correct” means, with respect to an accumulated funding deficiency or
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4971
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.