§6852 — Termination assessments in case of flagrant political expenditures of section 501(c)(3) organizations
2 citing cases
Statute Text — 26 U.S.C. §6852
If the Secretary finds that—
a section 501(c)(3) organization has made political expenditures, and
such expenditures constitute a flagrant violation of the prohibition against making political expenditures,
the Secretary shall immediately make a determination of any income tax payable by such organization for the current or immediately preceding taxable year, or both, and shall immediately make a determination of any tax payable under section 4955 by such organization or any manager thereof with respect to political expenditures during the current or preceding taxable year, or both. Notwithstanding any other provision of law, any such tax shall become immediately due and payable. The Secretary shall immediately assess the amount of tax so determined (together with all interest, additional amounts, and additions to the tax provided by law) for the current year or the preceding taxable year, or both, and shall cause notice of such determination and assessment to be given to the organization or any manager thereof, as the case may be, together with a demand for immediate payment of such tax.
In the case of a current taxable year, the Secretary shall determine the taxes for the period beginning on the 1st day of such current taxable year and ending on the date of the determination under paragraph (1) as though such period were a taxable year of the organization, and shall take into account any prior determination made under this subsection with respect to such current taxable year.
Any amounts collected as a result of any assessments under this subsection shall, to the extent thereof, be treated as a payment of income tax for such taxable year, or tax under section 4955 with respect to the expenditure, as the case may be.
This section shall not authorize any assessment of tax for the preceding taxable year which is made after the due date of the organization’s return for such taxable year (determined with regard to any extensions).
For purposes of this section, the terms “section 501(c)(3) organization”, “political expenditure”, and “organization manager” have the respective meanings given to such terms by section 4955.
The provisions of sections 6851(b), 6861(f), and 6861(g) shall apply with respect to any assessment made under subsection (a), except that determinations under section 6861(g) shall be made on the basis of whether the requirements of subsection (a)(1)(B) of this section are met in lieu of whether jeopardy exists.
Treasury Regulations
-
Treas. Reg. §301.6852-1Termination assessments of tax in the case of flagrant political expenditures of section 501(c)(3) organizations
(a) Authority for making. Any assessment under section 6852 as a result of a flagrant violation by a section 501(c)(3) organization of the prohibition against making political expenditures must be authorized by the District Director.
(b) Determination of income tax. An organization shall be subject to an assessment of income tax under section 6852 only if the flagrant violation of the prohibition against making political expenditures results in revocation of the organization's tax exemption under section 501(a) because it is not described in section 501(c)(3). An organization subject to such an assessment is not liable for income taxes for any period prior to the effective date of the revocation of the organization's tax exemption.
(c) Payment. Where a District Director has made a determination of income tax under paragraph (b) of this section or of section 4955 excise tax, notwithstanding any other provision of law, any tax will become immediately due and payable. The taxpayer is required to pay the amount of the assessment within 10 days after the District Director sends the notice and demand for immediate payment regardless of the filing of an administrative appeal or of a court petition. Regardless of filing an administrative appeal or of petitioning a court, enforced collection action may proceed after the 10-day payment period unless the taxpayer posts the bond described in section 6863. For purposes of collection procedures such as section 6331 (regarding levy), assessments under the authority of paragraph (a) of this section do not constitute situations in which the collection of such tax is in jeopardy and, therefore, do not suspend normal collection procedures.
(d) Effective date. This section is effective December 5, 1995.
-
Treas. Reg. §301.6852-1(a)Authority for making.
Authority for making. Any assessment under section 6852 as a result of a flagrant violation by a section 501(c)(3) organization of the prohibition against making political expenditures must be authorized by the District Director.
-
Treas. Reg. §301.6852-1(b)Determination of income tax.
Determination of income tax. An organization shall be subject to an assessment of income tax under section 6852 only if the flagrant violation of the prohibition against making political expenditures results in revocation of the organization's tax exemption under section 501(a) because it is not described in section 501(c)(3). An organization subject to such an assessment is not liable for income taxes for any period prior to the effective date of the revocation of the organization's tax exemption.
-
Treas. Reg. §301.6852-1(c)Payment.
Payment. Where a District Director has made a determination of income tax under paragraph (b) of this section or of section 4955 excise tax, notwithstanding any other provision of law, any tax will become immediately due and payable. The taxpayer is required to pay the amount of the assessment within 10 days after the District Director sends the notice and demand for immediate payment regardless of the filing of an administrative appeal or of a court petition. Regardless of filing an administrative appeal or of petitioning a court, enforced collection action may proceed after the 10-day payment period unless the taxpayer posts the bond described in section 6863. For purposes of collection procedures such as section 6331 (regarding levy), assessments under the authority of paragraph (a) of this section do not constitute situations in which the collection of such tax is in jeopardy and, therefore, do not suspend normal collection procedures.
-
Treas. Reg. §301.6852-1(d)Effective date.
Effective date. This section is effective December 5, 1995.
2 Citing Cases
, section 6330(e)(2), entitled "Levy upon appeal", provides an exception to this general rule, which exception the Commissioner may invoke iftwo conditions are met: "(...continued) Flagrant Political Expenditures of Section 501(c)(3) Organizations", sec. 6852, "Jeopardy Assessments ofIncome, Estate, Gift, and Certain Excise Taxes", sec. 6861, and "Jeopardy Assessment ofTaxes Other Than Income, Estate, Gift, and Certain Excise Taxes", sec. 6862. - 19 - [*19] Paragraph (1) shall not apply to a lev