26 U.S.C. § 4952 — Taxes on taxable expenditures

Page 3041 TITLE 26—INTERNAL REVENUE CODE § 4952 (A) a contributor to the trust, (B) a trustee of the trust, (C) an owner of more than 10 percent of— (i) the total combined voting power of a corporation, (ii) the profits interest of a partnership, or (iii) the beneficial interest of a trust or unincorporated enterprise, which is a contributor to the trust, (D) an officer, director, or employee of a person who is a contributor to the trust, (E) the spouse, ancestor, lineal descendant, or spouse of a lineal descendant of an indi- vidual described in subparagraph (A), (B), (C), or (D), (F) a corporation of which persons de- scribed in subparagraph (A), (B), (C), (D), or (E) own more than 35 percent of the total combined voting power, (G) a partnership in which persons de- scribed in subparagraph (A), (B), (C), (D), or (E), own more than 35 percent of the profits interest, or (H) a trust or estate in which persons de- scribed in subparagraph (A), (B), (C), (D), or (E), hold more than 35 percent of the bene- ficial interest. For purposes of subparagraphs (C)(i) and (F), there shall be taken into account indirect stockholdings which would be taken into ac- count under section 267(c), except that, for purposes of this paragraph, section 267(c)(4) shall be treated as providing that the members of the family of an individual are only those individuals described in subparagraph (E) of this paragraph. For purposes of subparagraphs (C) (ii) and (iii), (G), and (H), the ownership of profits or beneficial interests shall be deter- mined in accordance with the rules for con- structive ownership of stock provided in sec- tion 267(c) (other than paragraph (3) thereof), except that section 267(c)(4) shall be treated as providing that the members of the family of an individual are only those individuals de- scribed in subparagraph (E) of this paragraph. (f) Payments of benefits For purposes of this section, a payment, out of assets or income of a trust described in section 501(c)(21), for the purposes described in subclause (I) or (IV) of section 501(c)(21)(A)(i) shall not be considered an act of self-dealing. (Added Pub. L. 95–227, § 4(c)(1), Feb. 10, 1978, 92 Stat. 18; amended Pub. L. 96–596, § 2(a)(1)(G), (H), (2)(F), (3)(E), Dec. 24, 1980, 94 Stat. 3469–3471; Pub. L. 102–486, title XIX, § 1940(b), Oct. 24, 1992, 106 Stat. 3035.) Editorial Notes AMENDMENTS 1992—Subsec. (f). Pub. L. 102–486 substituted ‘‘sub- clause (I) or (IV) of section 501(c)(21)(A)(i)’’ for ‘‘clause (i) of section 501(c)(21)(A)’’. 1980—Subsec. (b)(1). Pub. L. 96–596, § 2(a)(1)(G), sub- stituted ‘‘taxable period’’ for ‘‘correction period’’. Subsec. (e)(1)(B), (C). Pub. L. 96–596, § 2(a)(2)(F), added subpar. (B) and redesignated former subpar. (B) as (C). Subsec. (e)(2)(B). Pub. L. 96–596, § 2(a)(1)(H), sub- stituted ‘‘taxable period’’ for ‘‘correction period’’. Subsec. (e)(4), (5). Pub. L. 96–596, § 2(a)(3)(E), redesig- nated par. (5) as (4) and struck out former par. (4) which defined correction period, with respect to any act of self-dealing, as the period beginning with the date on which the act of self-dealing occurs and ending 90 days after the date of mailing of a notice of deficiency under section 6212 of this title with respect to the tax im- posed by subsec. (b)(1) of this section, extended by any period in which a deficiency cannot be assessed under section 6213(a) of this title and any other period which the Secretary determines is reasonable and necessary to bring about correction of the act of self-dealing. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1992 AMENDMENT Amendment by Pub. L. 102–486 applicable to taxable years beginning after Dec. 31, 1991, see section 1940(d) of Pub. L. 102–486, set out as a note under section 192 of this title. EFFECTIVE DATE OF 1980 AMENDMENT For effective date of amendment by Pub. L. 96–596 with respect to any first tier tax and to any second tier tax, see section 2(d) of Pub. L. 96–596, set out as an Ef- fective Date note under section 4961 of this title. EFFECTIVE DATE Subchapter effective with respect to contributions, acts, and expenditures made after Dec. 31, 1977, in and for taxable years beginning after such date, see section 4(f) of Pub. L. 95–227, set out as a note under section 192 of this title. § 4952. Taxes on taxable expenditures (a) Tax imposed (1) On the fund There is hereby imposed on each taxable ex- penditure (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 21⁄2 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 ex- penditure. (b) Additional taxes (1) On the fund In any case in which an initial tax is im- posed by subsection (a)(1) on a taxable expend- iture and such expenditure is not corrected within the taxable period, there is hereby im- posed 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 im- posed 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 Page 3042 TITLE 26—INTERNAL REVENUE CODE § 4953 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 expenditure. (d) Taxable expenditure For purposes of this section, the term ‘‘taxable expenditure’’ means any amount paid or in- curred by a trust described in section 501(c)(21) other than for a purpose specified in such sec- tion. (e) Definitions (1) Correction The terms ‘‘correction’’ and ‘‘correct’’ mean, with respect to any taxable expenditure, re- covering part or all of the expenditure to the extent recovery is possible, and where full re- covery is not possible, contributions by the person or persons whose liabilities for black lung benefit claims (as defined in section 192(e)) are to be paid out of the trust to the ex- tent necessary to place the trust in a financial position not worse than that in which it would be if the taxable expenditure had not been made. (2) Taxable period The term ‘‘taxable period’’ means, with re- spect to any taxable expenditure, the period beginning with the date on which the taxable expenditure occurs and ending on the earlier of— (A) the date of mailing a notice of defi- ciency with respect to the tax imposed by subsection (a)(1) under section 6212, or (B) the date on which the tax imposed by subsection (a)(1) is assessed. (Added Pub. L. 95–227, § 4(c)(1), Feb. 10, 1978, 92 Stat. 21; amended Pub. L. 96–596, § 2(a)(1)(I), (2)(G), Dec. 24, 1980, 94 Stat. 3469, 3471.) Editorial Notes AMENDMENTS 1980—Subsec. (b)(1). Pub. L. 96–596, § 2(a)(1)(I), sub- stituted ‘‘taxable period’’ for ‘‘correction period’’. Subsec. (e)(2). Pub. L. 96–596, § 2(a)(2)(G), substituted provision defining taxable period as the period begin- ning with the date on which the taxable expenditure occurs and ending on the earlier of the date of mailing a notice of deficiency with respect to the tax imposed by subsec. (a)(1) of this section under section 6212 of this title or the date on which the tax imposed by sub- sec. (a)(1) of this section is assessed for provision defin- ing correction period as the period beginning with the date on which the taxable expenditure occurs and end- ing 90 days after the date of mailing a notice of defi- ciency under section 6212 of this title with respect to the tax imposed by subsec. (b)(1) of this section, ex- tended by any period in which the deficiency cannot be assessed under section 6213(a) of this title and any other period which the Secretary determines reason- able and necessary to bring about the correction of the taxable expenditure. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1980 AMENDMENT For effective date of amendment by Pub. L. 96–596 with respect to any first tier tax and to any second tier tax, see section 2(d) of Pub. L. 96–596, set out as an Ef- fective Date note under section 4961 of this title. § 4953. Tax on excess contributions to black lung benefit trusts (a) Tax imposed There is hereby imposed for each taxable year a tax in an amount equal to 5 percent of the amount of the excess contributions made by a person to or under a trust or trusts described in section 501(c)(21). The tax imposed by this sub- section shall be paid by the person making the excess contribution. (b) Excess contribution For purposes of this section, the term ‘‘excess contribution’’ means the sum of— (1) the amount by which the amount contrib- uted for the taxable year to a trust or trusts described in section 501(c)(21) exceeds the amount of the deduction allowable to such person for such contributions for the taxable year under section 192, and (2) the amount determined under this sub- section for the preceding taxable year, reduced by the sum of— (A) the excess of the maximum amount al- lowable as a deduction under section 192 for the taxable year over the amount contrib- uted to the trust or trusts for the taxable year, and (B) amounts distributed from the trust to the contributor which were excess contribu- tions for the preceding taxable year. (c) Treatment of withdrawal of excess contribu- tions Amounts distributed during the taxable year from a trust described in section 501(c)(21) to the contributor thereof the sum of which does not exceed the amount of the excess contribution made by the contributor shall not be treated as— (1) an act of self-dealing (within the meaning of section 4951), (2) a taxable expenditure (within the mean- ing of section 4952), or (3) an act contrary to the purposes for which the trust is exempt from taxation under sec- tion 501(a). (Added Pub. L. 95–227, § 4(c)(1), Feb. 10, 1978, 92 Stat. 22.) Subchapter C—Political Expenditures of Section 501(c)(3) Organizations Sec. 4955. Taxes on political expenditures of section 501(c)(3) organizations. Editorial Notes PRIOR PROVISIONS A prior subchapter C, consisting of sections 4961 to 4963 of this title, was redesignated subchapter E.