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Issue 4. Excise Tax on Payments Made by the Museum to GMC
We shall next turn our attention to whether petitioner,
petitioner's wife, and petitioner's daughter (the foundation
managers)8 are liable under section 4941(a)(2) for payments made
to GMC by the Museum. In general, section 4941(a)(1) imposes an
excise tax on the self-dealer for each self-dealing transaction.
When an excise tax is imposed under section 4941(a)(1), then
section 4941(a)(2) may impose excise taxes on the management of
the foundation as well. Section 4941(a)(2) provides:
In any case in which a tax is imposed by [section
4941(a)] paragraph (1), there is hereby imposed on the
participation of any foundation manager in an act of
self-dealing between a disqualified person and a
private foundation, knowing that it is such an act, a
tax equal to 2� percent of the amount involved with
respect to the act of self-dealing for each year (or
part thereof) in the taxable period, unless such
participation is not willful and is due to reasonable
cause. * * *
Thus, this tax is imposed only when (1) a tax is imposed under
section 4941(a)(1), (2) the participating foundation manager
7(...continued)
dealer excise tax, then it is also liable for the foundation
self-dealing excise tax under sec. 4941(b)(1). GMC does not
dispute this assertion. The parties have stipulated that the
transactions at issue were not corrected within the taxable
period.
8A separate excise tax was imposed on petitioner, on
petitioner's wife, and on petitioner's daughter (the foundation
managers). However, the legal issues and relevant facts are
identical with respect to each of the foundation managers. For
brevity, we will combine our examination of each tax into a
single discussion and refer to the above-named parties collec-
tively as the foundation managers where possible.
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