26 U.S.C. § 7428 — Declaratory judgments relating to status and classification of organizations under section 501(c)(3), etc.
submitted 50 years ago by Pub. L. 94-455 to r/title-26-INTERNAL-REVENUE-CODE · 924 words · no verdicts yet
In specified disputes over an organization’s tax-exempt or foundation classification, a qualifying organization may obtain a declaratory judgment from one of three courts. The section sets filing, exhaustion, timing, contribution, and subpoena rules.
(a) Remedy. In an actual controversy involving the Secretary’s decision about an organization’s initial or continuing qualification as a section 501(c)(3), 170(c)(2), 501(c) other than paragraph (3), or 501(d) organization, its private-foundation status, its private-operating-foundation status, or its cooperative status under section 521(b), or the Secretary’s failure to decide such an issue, the organization may file an appropriate pleading. The Tax Court*, Court of Federal Claims, or District of Columbia district court may declare the organization’s qualification or classification. The declaration has the force of a Tax Court decision or final judgment of the other court and may be reviewed in the same way. Continuing status includes revocation or another change.
(b) Limits. (1) Only the organization whose status is disputed may file. (2) A court may not issue relief unless it finds the organization exhausted available IRS administrative remedies. For a failure to decide, exhaustion is deemed complete 270 days after the request if the organization timely took all reasonable steps. (3) If the Secretary* mailed the determination by certified or registered mail, the pleading must be filed before the 91st day after mailing. (4) No action is available for a section 6033(j)(1) revocation.
(c) Contributions during a case. (1) If the issue is revocation of section 170(c)(2) status, the case was timely filed, and a final Tax Court decision or entered district-court or Claims Court judgment finds the organization was not described in section 170(c)(2), the organization is nevertheless treated as having that status for section 170 from publication of the revocation notice until the first court determination. (2) This applies only to an individual’s contributions up to $1,000 in total during that period, treating spouses as one contributor, and to section 170(c)(2) tax-exempt organizations, excluding one itself under a pending revocation case. (3) It does not apply to an individual responsible in whole or part for the conduct underlying revocation.
(d) Subpoenas. In a District of Columbia district-court action, a trial or hearing subpoena may be served anywhere in the United States.
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.
Source credit: (Added Pub. L. 94–455, title XIII, § 1306(a), Oct. 4, 1976, 90 Stat. 1717; amended Pub. L. 95–600, title VII, § 701(dd)(2), Nov. 6, 1978, 92 Stat. 2924; Pub. L. 97–164, title I, § 152, Apr. 2, 1982, 96 Stat. 46; Pub. L. 98–369, div. A, title X, § 1033(b), July 18, 1984, 98 Stat. 1039; Pub. L. 108–357, title III, § 317(a), Oct. 22, 2004, 118 Stat. 1470; Pub. L. 109–280, title XII, § 1223(c), Aug. 17, 2006, 120 Stat. 1091; Pub. L. 114–113, div. Q, title IV, § 406(a), Dec. 18, 2015, 129 Stat. 3120; Pub. L. 115–141, div. U, title IV, § 401(a)(325)(A), (B), Mar. 23, 2018, 132 Stat. 1199, 1200.)
- 1976Enacted · Pub. L. 94-455 · 90 Stat. 1717
- 1978Amended · Pub. L. 95-600 · 92 Stat. 2924
- 1982Amended · Pub. L. 97-164 · 96 Stat. 46
- 1984Amended · Pub. L. 98-369 · 98 Stat. 1039
- 2004Amended · Pub. L. 108-357 · 118 Stat. 1470
- 2006Amended · Pub. L. 109-280 · 120 Stat. 1091
- 2015Amended · Pub. L. 114-113 · 129 Stat. 3120
- 2018Amended · Pub. L. 115-141 · 132 Stat. 1199, 1200
A history note hasn’t been published yet. The record shows enactment by Pub. L. 94-455 on 1976-10-04.
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