§7428 — Declaratory judgments relating to status and classification of organizations under section 501(c)(3), etc.
153 cases·98 followed·7 distinguished·2 questioned·2 criticized·4 overruled·40 cited—64% support
Statute Text — 26 U.S.C. §7428
In a case of actual controversy involving—
a determination by the Secretary—
with respect to the initial qualification or continuing qualification of an organization as an organization described in section 501(c)(3) which is exempt from tax under section 501(a) or as an organization described in section 170(c)(2),
with respect to the initial classification or continuing classification of an organization as a private foundation (as defined in section 509(a)),
with respect to the initial classification or continuing classification of an organization as a private operating foundation (as defined in section 4942(j)(3)),
with respect to the initial classification or continuing classification of a cooperative as an organization described in section 521(b) which is exempt from tax under section 521(a), or
with respect to the initial qualification or continuing qualification of an organization as an organization described in section 501(c) (other than paragraph (3)) or 501(d) and exempt from tax under section 501(a), or
a failure by the Secretary to make a determination with respect to an issue referred to in paragraph (1),
upon the filing of an appropriate pleading, the United States Tax Court, the United States Court of Federal Claims, or the district court of the United States for the District of Columbia may make a declaration with respect to such initial qualification or continuing qualification or with respect to such initial classification or continuing classification. Any such declaration shall have the force and effect of a decision of the Tax Court or a final judgment or decree of the district court or the Court of Federal Claims, as the case may be, and shall be reviewable as such. For purposes of this section, a determination with respect to a continuing qualification or continuing classification includes any revocation of or other change in a qualification or classification.
A pleading may be filed under this section only by the organization the qualification or classification of which is at issue.
A declaratory judgment or decree under this section shall not be issued in any proceeding unless the Tax Court, the Court of Federal Claims, or the district court of the United States for the District of Columbia determines that the organization involved has exhausted administrative remedies available to it within the Internal Revenue Service. An organization requesting the determination of an issue referred to in subsection (a)(1) shall be deemed to have exhausted its administrative remedies with respect to a failure by the Secretary to make a determination with respect to such issue at the expiration of 270 days after the date on which the request for such determination was made if the organization has taken, in a timely manner, all reasonable steps to secure such determination.
If the Secretary sends by certified or registered mail notice of his determination with respect to an issue referred to in subsection (a)(1) to the organization referred to in paragraph (1), no proceeding may be initiated under this section by such organization unless the pleading is filed before the 91st day after the date of such mailing.
No action may be brought under this section with respect to any revocation of status described in section 6033(j)(1).
If—
the issue referred to in subsection (a)(1) involves the revocation of a determination that the organization is described in section 170(c)(2),
a proceeding under this section is initiated within the time provided by subsection (b)(3), and
either—
a decision of the Tax Court has become final (within the meaning of section 7481), or
a judgment of the district court of the United States for the District of Columbia has been entered, or
a judgment of the Court of Federal Claims has been entered,
and such decision or judgment, as the case may be, determines that the organization was not described in section 170(c)(2),
then, notwithstanding such decision or judgment, such organization shall be treated as having been described in section 170(c)(2) for purposes of section 170 for the period beginning on the date on which the notice of the revocation was published and ending on the date on which the court first determined in such proceeding that the organization was not described in section 170(c)(2).
Paragraph (1) shall apply only—
with respect to individuals, and only to the extent that the aggregate of the contributions made by any individual to or for the use of the organization during the period specified in paragraph (1) does not exceed $1,000 (for this purpose treating a husband and wife as one contributor), and
with respect to organizations described in section 170(c)(2) which are exempt from tax under section 501(a) (for this purpose excluding any such organization with respect to which there is pending a proceeding to revoke the determination under section 170(c)(2)).
This subsection shall not apply to any individual who was responsible, in whole or in part, for the activities (or failures to act) on the part of the organization which were the basis for the revocation.
In any action brought under this section in the district court of the United States for the District of Columbia, a subpoena requiring the attendance of a witness at a trial or hearing may be served at any place in the United States.
153 Citing Cases
125 (superseded by Rev.
Petitioner challenged respondent's determination by timely filing a petition with the Court for a declaratoryjudgment pursuant to section 7428(a).
(continued...) SERVED Nov 16 2015 - 2 - [*2] Having exhausted its administrative remedies, GameHearts challenged that determination by timely seeking a declaratoryjudgment pursuant to section 7428(a).
letter, which determined that, for "Tax Years Ending: - 3 - [*3] June 30, 2003 and all subsequent years", Capital Gymnastics was no longer exempt from Federal income tax under section 501(a).1 Capital Gymnastics challenged the determination by timely petitioning this Court for declaratory judgment pursuant to section 7428(a).
On January 20, 2011, PIC timely petitioned this Court pursuant to section 74281 and Rule 210, seeking a declËratoryjudgment that PIC was an organization described in section 501(c)(3) duri:1g 2002 and 2003 (the examination years) and that the IRS's revocation ofPIC's tax-exempt status be declared null and void.
OPINION FOLEY, Judge : Pursuant to section 7428 .(a),' petitioner seeks a declaratory judgment that it meets the requirements of section 501(c)(3) and is exempt from Federal income taxation .
After having exhausted its administrative remedies , petitioner challenged that determination by timely seeking a declaratory judgment pursuant to section 7428(a) .
OPINION THORNTON, Judge : Respondent denied petitioner's request for tax-exempt status under section 501(c)(3) .' Pursuant to section 7428, petitioner seeks declaratory relief .
- 2 - THORNTON, Judge: Petitioner brought this action for a declaratory judgment, pursuant to section 7428 and Title XXI of this Court's Rules.
111 - 4 - CHABOT, Judge: Petitioner initiated this action pursuant to section 74281 for a declaratory judgment that for all periods beginning on or after June 11, 1984, it qualifies as an organization described in section 501(c)(3) which is exempt from tax under section 501(a) and that it qualifies as an organization described in section 170(c)(2).
trols whether a dissolved corporation has the legal capacity to be a petitioner in a tax deficiency case”. However, according to respondent, this point is irrelevant to the determination of wheth- er an actual controversy exists for the purposes of I.R.C. § 7428 and/or Tax Court Rule 210(c)(2)(C). A deficiency proceeding clearly involves an actual con- troversy even when a dissolved corporation is the petitioner since an actual tax liability is at issue. In the instant case, there is no actual c
3 Both the Ninth Circuit and this Court have addressed petitions filed pursuant to section 7428, see AMA Enters., Inc.
Accordingly, the Court has held that taxpayers may not withdraw a petition in such a case. See Estate of Ming v. Commissioner, 62 T.C. 519, 522–23 (1974). However, the Court considers other types of cases to which sections 6213 and 7459(d) do not apply, including under provisions of the Code providing for declaratory judgment by the Court. See, e.g., I.R.C. §§ 7428, 7476, 7477, 7478, 7479. See generally Rule 210. In such cases, the Court has previously granted motions to voluntarily dismiss or w
facts 6 [*6] not otherwise in the administrative record be introduced in evidence by testimony or stipulation in a section 7428 declaratory judgment proceeding would convert that proceeding from a judicial review of administrative action to a trial de novo.”).
, it did not have the capacity to engage in litigation because its corporate "powers, rights and privileges" were suspended under California law at the time the petition was filed; the subsequent revival of AMA's corporate powers after the statutory period did not retroactively satisfy section 7428(b)(3), which requires that an organization file a section 7428 petition within 90 days ofthe Service's mailing an adverse determination letter); John C.
Pursuant to section 7428, petitioner seeks a declaratory judgment that respondent's denial of its request for tax-exempt status was erroneous and that petitioner .qualifies for tax-exempt status under section 501(c)(3) .
f section 501(c)(3).1 Respondent therefore revoked petitioner’s tax-exempt status effective September 22, 1995. Petitioner challenged respondent’s determination by timely invoking the jurisdiction of this Court for a declaratory judgment pursuant to section 7428. In accordance with Rule 217, the administrative record underlying respondent’s determination was filed with the Court, and a subsequent trial was conducted. At this juncture, the issue for decision is whether petitioner is operated excl
MEMORANDUM OPINION SWIFT, Judge : This is an action for section 7428 declaratory relief relating to respondent's denial of petitioner's request for recognition as a section 501(c)(3) tax- exempt organization .
failure to make a determination. Held: P failed to exhaust its administrative remedies, a jurisdictional prerequisite to declaratory proceedings in the Tax Court relating to the status of an organization under sec. 501(c)(3), I.R.C., as required by sec. 7428, I.R.C. Therefore, jurisdiction of this Court is not available. ggaVED DEC 2 2 EM -2- Arthur Carson (an officer), for petitioner. Helen F. Rogers, for respondent. MEMORANDUM OPINION NIMS, Judge: Petitioner brought an action for a declarator
7428; see also Rule 211(a), (b), (g). Following the parties’ filing with the Court of the administrative record underlying respondent’s determination, the Court’s granting of the parties’ joint motion to calendar this case for trial, and the conclusion of the ensuing trial, we decide whether respondent properly revoked petitioner’s tax-exempt
Pursuant to section 7428 and title XXI of the Tax Court Rules of Practice and Procedure, SNI seeks a declaratory judgment that it is a qualified organization under section 501(c)(3).
Respondent determined that petitioner is a private foundation as defined in section 509(a), and petitioner brought this action, pursuant to section 7428, for a declaratory judgment that it is a supporting organization within the meaning of section 509(a)(3) and therefore not a private foundation.
Pursuant to section 7428 and title XXI of the Tax Court Rules of Practice and Procedure, petitioner seeks a declaratory judgment that it is a qualified organization under section 501(c)(3).
Pursuant to section 7428 and title XXI of the Tax Court Rules of Practice and Procedure, petitioner seeks a declaratory judgment that it is a qualified organization under - 2 - section 501(c)(3).
The parties dispute whether petitioner meets the operational test of section 1.501(c)(3)-1, Income Tax Regs. We hold it does not. Unless otherwise stated, - 2 - section references are to the applicable versions of the Internal Revenue Code. Rule references are to the Tax Court Rules of Practice and Procedure. Background We decide this c
The parties dispute whether petitioner meets the operational test of section 1.501(c)(3)- 1(c), Income Tax Regs. We hold it does not. Unless otherwise stated, section references are to the applicable versions of the - 2 - Internal Revenue Code. Rule references are to the Tax Court Rules of Practice and Procedure. Background We decide th
petitioner does not qualify for the exception from private foundation categorization contained in section 509(a)(2). Petitioner challenges respondent's determination by invoking the jurisdiction of this Court for a declaratory judgment pursuant to section 7428. Unless otherwise indicated, all section references are to sections of the Internal Revenue Code in effect for the years in issue. All Rule references are to the Tax Court Rules of Practice and Procedure. All dollar amounts are rounded to
Pursuant to section 7428 and title XXI of the Tax Court Rules of Practice and Procedure, petitioner seeks a declaratory judgment that it is a qualified organization under section 501(c)(3).
The parties dispute whether petitioner meets the operational test of section 1.501(c)(3)-1, Income Tax Regs. We hold it does not. Unless otherwise stated, section references are to the applicable versions of the Internal - 2 - Revenue Code. Rule references are to the Tax Court Rules of Practice and Procedure. Background We decide this c
The parties dispute whether petitioner meets the operational test of section 1.501(c)(3)-1, Income Tax Regs. We hold it does not. Unless otherwise stated, - 2 - section references are to the applicable versions of the Internal Revenue Code. Rule references are to the Tax Court Rules of Practice and Procedure. Background We decide this c
The parties dispute whether petitioner meets the operational test of section 1.501(c)(3)-1, Income Tax Regs. We hold it does not. Unless otherwise stated, - 2 - section references are to the applicable versions of the Internal Revenue Code. Rule references are to the Tax Court Rules of Practice and Procedure. Background We decide this c
The parties dispute whether petitioner meets the operational test of section 1.501(c)(3)-1, Income Tax Regs. We hold it does not. Unless otherwise stated, - 2 - section references are to the applicable versions of the Internal Revenue Code. Rule references are to the Tax Court Rules of Practice and Procedure. Background We decide this c
The parties dispute whether petitioner meets the operational test of section 1.501(c)(3)-1, Income Tax Regs. We hold it does not. Unless otherwise stated, section references are to the applicable versions of the Internal - 2 - Revenue Code. Rule references are to the Tax Court Rules of Practice and Procedure. Background We decide this c
MEMORANDUM FINDINGS OF FACT AND OPINION VASQUEZ, Judge: Petitioner, pursuant to section 7428,1 asks for a declaratory judgment that it is entitled to an exemption from Federal income taxes under section 501(c)(3).
under section 501(a). Specifically, the Commissioner determined that petitioner failed to establish that it operated exclusively for exempt purposes under section 501(c)(3). This case is before us on a petition for declaratory judgment pursuant to section 7428. The parties filed a joint stipulation as to the completeness and correctness of the administrative record and submitted this case for determination under Rule 122. Kristine Hurd and James Gould are the sole owners of KJ's Place, a lounge
On August 30, 1991, petitioner filed a petition for declaratory judgment pursuant to section 7428 requesting this Court to make a declaration regarding its continuing tax-exempt status.
facts not otherwise in the administrative record to be introduced in evidence by testimony or stipulation in a section 7428 declaratory judgment proceeding would convert that proceeding from a judicial review of administrative action to a trial de novo.”).
ourt, it did not have the capacity to engage in litigation because its corporate powers, rights, and privileges were suspended under California law at the time the petition was filed; the subsequent revival ofits corporate powers after the statutory period did not retroactively satisfy section 7428(b)(3), which requires that an organization file a section 7428 petition within 90 days ofthe Service's mailing an adverse determination letter); John C.
ourt, it did not have the capacity to engage in litigation because its corporate powers, rights, and privileges were suspended under California law at the time the petition was filed; the subsequent revival ofits corporate powers after the statutory period did not retroactively satisfy section 7428(b)(3), which requires that an organization file a section 7428 petition within 90 days ofthe Service's mailing an adverse determination letter); John C.
AHA filed a petition in the Court for a declaratoryjudgment under section 7428 with respect to a notice ofdetermination that respondent had issued to it on February 3, 2015, thereby commencing the case at docket No.
ted States, 89 Fed. Cl. 618, 623 (2009) (certification by a State employment security agency is a prerequisite to the work opportunity credit under sec. 38(b)(2) for wages paid to “a qualified SSI recipient” under sec. 51(d)(1)(H)). See also, e.g., sec. 7428 (declaratory remedy by which an organization claiming tax-exempt status under sec. 501(c)(3) may challenge the IRS’s adverse ruling or failure to rule on the organization’s application for recognition of exempt status); sec. 7478 (declarator
21"[T]he standard * * * of review to be employed by the District Court [under section 7428] in examining the determination of the Secretary [as to.
“[T]he standard * * * of review to be employed by the District Court [under section 7428] in examining the determination of the Secretary [as to initial qualification for tax-exempt status] * * * is to be de novo.
cases provide for consideration of evidence not in the administrative record under various circumstances. Our disposition of actions under sec. 7476 for declaratory judgment involving the initial qualification of a retirement plan, and actions under sec. 7428 for the initial qualification or classification of an exempt organization, private foundation, or private operating foundation is (continued...) - 13 - 4. Whether Trial De Novo Is Appropriate in Determining Whether Respondent’s Determinatio
The other two types of cases cited by the majority involve declaratory judgments with respect to determinations of the Commissioner under section 7428 (tax-exempt sta:us) and section 7476 (qualified status of retirement plans).7 De novo 6 The fact that our application of an abuse of discretion standard may be the subject of a trial de novo does not necessarily mean that we are free to substitute our judgment for that of the Commissioner in such cases.
cases provide for consideration of evidence not in the administrative record under various circumstances. Our disposition of actions under sec. 7476 for declaratory judgment involving the initial qualification of a retirement plan and actions under sec. 7428 for the initial qualification or classification of an exempt organization, private foundation, or private operating foundation is “ordinarily” based on the administrative record, unless, “with the permission of the Court, upon good cause sh
r request for a determination in respect of its exemption under section 501(c)(3), within the meaning of section 7428(b)(2), that respondent had failed to make a determination with respect to such request, and that petitioner had filed a proper and timely petition for a declaratory judgment so that all the jurisdictional requirements prescribed by section 7428 had been satisfied.
te of Decision.--A decision of the Tax Court (except a decision dismissing a proceeding for lack of jurisdiction) shall be held to be rendered upon the date that an order specifying the amount of the deficiency is entered in the records of the Tax Court or, in the case of a declaratory judgment proceeding under part IV of this subchapter, or under section 7428 or in the case of an action brought under section 6226 or section 6228(a), the date of the court's order entering the decision.
liability arises, (C) in the case of a person seeking a declaratory decision under section 7476, the principal place of business, or principal office or agency of the employer, (D) in the case of an organization seeking a declaratory decision under section 7428, the principal office or agency of the organization, or (E) in the case of a petition under section 6226 or 6228(a), the principal place of business of the partnership.
MEMORANDUM OPINION KÖRNER, Judge: By petition filed March 24, 1995, The Church of the Living Tree (petitioner) through John Stahl, trustee, filed a petition for a declaratory judgment under section 7428 that petitioner was entitled to exemption from income tax under section 501(c)(3) as a church.
liability arises, (C) in the case of a person seeking a declaratory decision under section 7476, the principal place of business, or principal office or agency of the employer, (D) in the case of an organization seeking a declaratory decision under section 7428, the principal office or agency of the organization, or (E) in the case of a petition under section 6226 or 6228(a), the principal place of business of the partnership.