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between a private foundation and a disqualified person. In
addition, the parties have agreed that the foundation managers
were aware the Museum was making payments to GMC, and the mana-
gers did not oppose the making of these payments. On the basis
of these facts, we conclude respondent has proven, by clear and
convincing evidence, that the foundation managers possessed
actual knowledge of sufficient facts concerning the transactions
to establish the arrangements with GMC were self-dealing trans-
actions.
Respondent has satisfied both the first and second require-
ments of section 4941(a)(2). First, we have concluded that,
under section 4941(a)(1), an excise tax should be imposed on the
payments from the Museum to GMC. Second, respondent has
established that the foundation managers possessed sufficient
"knowledge" concerning the self-dealing payments to GMC. Next,
we shall evaluate whether the foundation managers made the
payments willfully and without reasonable cause, the third
requirement under section 4941(a)(2).
The regulations define "willful" participation by the
foundation manager as conduct that is "voluntary, conscious, and
intentional." Sec. 53.4941(a)-1(b)(4), Foundation Excise Tax
Regs. On the basis of the facts, we conclude the foundation
managers voluntarily and intentionally caused the Museum to enter
into the transactions with GMC. Accordingly, we sustain
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