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

submitted 48 years ago by Pub. L. 95-227 to r/title-26-INTERNAL-REVENUE-CODE · 516 words · no verdicts yet

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This section taxes taxable expenditures from qualifying black-lung-benefit trusts and provides additional taxes, shared liability, and definitions for correction and taxable period.

(a) Tax imposed. (1) On the fund. Each taxable expenditure defined in (d) from the assets or income of a section 501(c)(21) trust creates a tax of 10% of the amount. The trustee pays it from trust assets. (2) On the trustee. A trustee who agrees to the expenditure knowing it is taxable owes 2.5%, unless the agreement was not willful and was due to reasonable cause. That trustee pays. (b) Additional taxes. (1) If the expenditure is not corrected during the taxable period, the trustee pays from trust assets an additional 100% tax. (2) If a trustee refused to agree to all or part of correction, that trustee owes 50% of the expenditure. (c) If more than one person is liable under (a)(2) or (b)(2) for one expenditure, each is liable for the full tax. (d) “Taxable expenditure” means any amount paid or incurred by a section 501(c)(21) trust for a purpose other than one specified in that section. (e) (1) “Correction” means recovering as much as possible and, if full recovery is impossible, contributions by the person or persons whose black-lung-benefit liabilities, as defined in section 192(e), are to be paid from the trust, in the amount needed to leave the trust no worse financially than if the expenditure had not occurred. (2) “Taxable period” starts when the expenditure occurs and ends when the section 6212 deficiency notice for the (a)(1) tax is mailed or that tax is assessed, whichever comes first.

the actual law source: uscode.house.gov ↗public domain

(a) Tax imposed

(1) On the fund

There is hereby imposed on each taxable expenditure (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 2½ 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 expenditure.

(b) Additional taxes

(1) On the fund

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 trustee out of the assets of the trust.

(2) On the trustee

In any case in which an additional tax is imposed 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 tax imposed by this paragraph shall be paid by any trustee who refused to agree to part or all of the correction.

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 incurred by a trust described in section 501(c)(21) other than for a purpose specified in such section.

(e) Definitions

(1) Correction

The terms “correction” and “correct” mean, with respect to any taxable expenditure, recovering part or all of the expenditure to the extent recovery is possible, and where full recovery 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 extent 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 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.

Source credit: (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.)

history & why it existsrecord from the source credit

1978Enacted · Pub. L. 95-227 · 92 Stat. 21
1980Amended · Pub. L. 96-596 · 94 Stat. 3469, 3471

A history note hasn’t been published yet. The record shows enactment by Pub. L. 95-227 on 1978-02-10.

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