Ignorance of the Law Is No Excuse: IRS Denies Request for Abatement of First-Tier Foundation Excise Taxes
Author: Katherine E. David.
Source: Volume 15, Number 03, March/April 2016 , pp.3-7(5)
< previous article |next article > |return to table of contents
Abstract:
A recent Technical Advice Memorandum1 (TAM) makes clear that the bar for first-tier foundation excise tax abatement is higher than one might have believed. In order to qualify for abatement, a private foundation must show reasonable cause. The fact that a foundation did not act with willful neglect is not sufficient. The memorandum reviewed here grew out of a case in which a foundation, organized as a trust under state law, made grants that were ultimately deemed subject to excise tax, even though the activities funded were entirely within the scope of the foundation’s charitable remit.Keywords: IRC §4945 Excise Tax on Taxable Expenditures ; Treas. Reg. §53.4945-5(b)(2) and (3); Pre-Grant Inquiries; Written Grant Agreements; Forms 990-PF
Affiliations:
1: Strasburger & Price, LLP.