U.S. Tax Law: Internal Revenue Code
U.S. GAAP Codification IFRS U.S. Tax Code

U.S. Tax Law
Internal Revenue Code

U.S. GAAP Codification U.S. Tax Code by Section
Financial Accounting Intermediate Accounting Advanced Accounting
IFRS-U.S. GAAP ComparisonSecurities Law Library




USC Title 26 enacted through 2008

§ 4945. Taxes on taxable expenditures

 
(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
 
With respect to any one taxable expenditure, the maximum amount of the tax imposed by subsection (a)(2) shall not exceed $10,000, and the maximum amount of the tax imposed by subsection (b)(2) shall not exceed $20,000.
 
(d)
Taxable expenditure
 
For purposes of this section, the term "taxable expenditure" means any amount paid or incurred by a private foundation -
 
(1)
to carry on propaganda, or otherwise to attempt, to influence legislation, within the meaning of subsection (e),
 
(2)
except as provided in subsection (f), to influence the outcome of any specific public election, or to carry on, directly or indirectly, any voter registration drive,
 
(3)
as a grant to an individual for travel, study, or other similar purposes by such individual, unless such grant satisfies the requirements of subsection (g),
 
(4)
as a grant to an organization unless -
 
(A)
such organization -
 
(i)
is described in paragraph (1) or (2) of section 509(a),
 
(ii)
is an organization described in section 509(a)(3) (other than an organization described in clause (i) or (ii) of section 4942(g)(4)(A)), or
 
(iii)
is an exempt operating foundation (as defined in section 4940(d)(2)), or
 
(B)
the private foundation exercises expenditure responsibility with respect to such grant in accordance with subsection (h), or
 
(5)
for any purpose other than one specified in section 170(c)(2)(B).
 
(e)
Activities within subsection (d)(1)
 
For purposes of subsection (d)(1), the term "taxable expenditure" means any amount paid or incurred by a private foundation for -
 
(1)
any attempt to influence any legislation through an attempt to affect the opinion of the general public or any segment thereof, and
 
(2)
any attempt to influence legislation through communication with any member or employee of a legislative body, or with any other government official or employee who may participate in the formulation of the legislation (except technical advice or assistance provided to a governmental body or to a committee or other subdivision thereof in response to a written request by such body or subdivision, as the case may be),
 
other than through making available the results of nonpartisan analysis, study, or research. Paragraph (2) of this subsection shall not apply to any amount paid or incurred in connection with an appearance before, or communication to, any legislative body with respect to a possible decision of such body which might affect the existence of the private foundation, its powers and duties, its tax-exempt status, or the deduction of contributions to such foundation.
 
(f)
Nonpartisan activities carried on by certain organizations
 
Subsection (d)(2) shall not apply to any amount paid or incurred by any organization -
 
(1)
which is described in section 501(c)(3) and exempt from taxation under section 501(a),
 
(2)
the activities of which are nonpartisan, are not confined to one specific election period, and are carried on in 5 or more States,
 
(3)
substantially all of the income of which is expended directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated,
 
(4)
substantially all of the support (other than gross investment income as defined in section 509(e)) of which is received from exempt organizations, the general public, governmental units described in section 170(c)(1), or any combination of the foregoing; not more than 25 percent of such support is received from any one exempt organization (for this purpose treating private foundations which are described in section 4946(a)(1)(H) with respect to each other as one exempt organization); and not more than half of the support of which is received from gross investment income, and
 
(5)
contributions to which for voter registration drives are not subject to conditions that they may be used only in specified States, possessions of the United States, or political subdivisions or other areas of any of the foregoing, or the District of Columbia, or that they may be used in only one specific election period.
 
In determining whether the organization meets the requirements of paragraph (4) for any taxable year of such organization, there shall be taken into account the support received by such organization during such taxable year and during the immediately preceding 4 taxable years of such organization (excluding therefrom any preceding taxable year which begins before January 1, 1970). Subsection (d)(4) shall not apply to any grant to an organization which meets the requirements of this subsection.
 
(g)
Individual grants
 
Subsection (d)(3) shall not apply to an individual grant awarded on an objective and nondiscriminatory basis pursuant to a procedure approved in advance by the Secretary, if it is demonstrated to the satisfaction of the Secretary that -
 
(1)
the grant constitutes a scholarship or fellowship grant which would be subject to the provisions of section 117(a) (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986) and is to be used for study at an educational organization described in section 170(b)(1)(A)(ii),
 
(2)
the grant constitutes a prize or award which is subject to the provisions of section 74(b)(without regard to paragraph (3) thereof), if the recipient of such prize or award is selected from the general public, or
 
(3)
the purpose of the grant is to achieve a specific objective, produce a report or other similar product, or improve or enhance a literary, artistic, musical, scientific, teaching, or other similar capacity, skill, or talent of the grantee.
 
(h)
Expenditure responsibility
 
The expenditure responsibility referred to in subsection (d)(4) means that the private foundation is responsible to exert all reasonable efforts and to establish adequate procedures -
 
(1)
to see that the grant is spent solely for the purpose for which made,
 
(2)
to obtain full and complete reports from the grantee on how the funds are spent, and
 
(3)
to make full and detailed reports with respect to such expenditures to the Secretary.
 
(i)
Other definitions
 
For purposes of this section -
 
(1)
Correction
 
The terms "correction" and "correct" means, with respect to any taxable expenditure, (A) recovering part or all of the expenditure to the extent recovery is possible, and where full recovery is not possible such additional corrective action as is prescribed by the Secretary by regulations, or (B) in the case of a failure to comply with subsection (h)(2) or (h)(3), obtaining or making the report in question.
 
(2)
Taxable period
 
The term "taxable period" means, with respect 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 deficiency 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.








Tax Code (Internal Revenue Code) Section Index


U.S. GAAP by Codification Topic
 
105 GAAP Hierarchy
105 GAAP History

205 Presentation of Financial Statements
205-20 Discontinued Operations
210 Balance Sheet
210-20 Offsetting
220 Comprehensive Income
225 Income Statement
225-20 Extraordinary and Unusual Items
230 Statement of Cash Flows
250 Accounting Changes and Error Corrections
260 Earnings per Share
270 Interim Reporting

310 Impairment of a Loan
320 Investment Securities
320 Other-Than-Temporary Impairments, FSP FAS 115-2
320-10-05 Overview of Investments in Other Entities
320-10-35 Reclassification of Investments in Securities
323-10 Equity Method Investments
323-30 Investments in Partnerships and Joint Ventures
325-20 Cost Method Investments
330 Inventory

340-20 Capitalized Advertising Costs
350-20 Goodwill
350-30 Intangibles Other than Goodwill
350-40 Internal-Use Software
350-50 Website Development Costs
360 Property, Plant and Equipment
360-20 Real Estate Sales

410 Asset Retirement and Environmental Obligations
420 Exit or Disposal Cost Obligations
450 Contingencies
450-20 Loss Contingencies
450-30 Gain Contingencies
480 Redeemable Financial Instruments

505-20 Stock Dividends, Stock Splits
505-30 Treasury Stock

605 SEC Staff Accounting Bulletin, Topic 13
605-25 Revenue Recognition - Multiple Element Arrangements

715-30 Defined Benefit Plans - Pension
718 Share-Based Payment
730 Research and Development
730-20 Research and Development Arrangements

805 Business Combinations
810 Consolidation
810 Noncontrolling Interests
810 Consolidation of Variable Interest Entities, SFAS 167

815 Derivatives and Hedging Overview

820 Fair Value Measurements
820 Fair value when the markets are not active, FSP FAS 157-4
825 Fair Value Option

830 Foreign Currency Matters
830-20 Foreign Currency Transactions
830-30 Translation of Financial Statements
835 Interest
835-20 Capitalization of Interest
835-30 Imputation of Interest

840 Leases
840-20 Operating Leases
840-30 Capital Leases
840-40 Sale-Leaseback Transactions
845 Nonmonetary Transactions

855 Subsequent Events
860-20 Sale of Financial Assets, SFAS 166
860-50 Servicing Assets and Liabilities, SFAS 156

985-20 Costs of software to be sold


U.S. GAAP Codification
Accounting Topics
Tax Code (Internal Revenue Code) Section Index




Disclaimer: Information on this page is provided for general understanding of tax concepts and rules only, not for the application in real tax situations. Seek advice from qualified professionals to address tax related questions.


Copyright © 2010 by CPAClass.com.TM  All Rights Reserved.
No copyright claimed on original U.S. Government works.