- 36 -
imposing the foundation manager excise tax on these two
transactions.
The record is less than complete regarding the $3,000
payment made for the benefit of the Company.9 The payment was
made by the Museum on behalf of the Company, a disqualified
person. The Company has not reimbursed the Museum. Respondent,
again, must prove by clear and convincing evidence that the
foundation managers participated knowingly in this transaction.
Sec. 7454(b); Rule 142(c). Respondent has failed to carry this
burden. First, respondent has not shown that petitioner or
petitioner's wife had any knowledge of this transaction. We
refuse to presume that, because the transaction occurred,
petitioner or petitioner's wife must have known about it.
Consequently, we do not sustain respondent's determination with
respect to petitioner or petitioner's wife as it relates to this
transaction.
9On brief, the foundation managers contend that respondent
has conceded this issue and directs our attention to the
stipulation of facts filed in this case. Particularly, the
foundation managers point to the stipulation concerning this
payment, which reads: "the parties agree that John W. Madden,
Jr. is not liable for the following [$3,000] payment made by the
Museum for the benefit of the John Madden Company as a self-
dealer under I.R.C. �� 4941(a)(1) and (b)(1)". The stipulation
makes no mention of potential liability under sec. 4941(a)(2).
We will not read into the stipulation matters that are not
expressly covered by it. See Rakosi v. Commissioner, T.C. Memo.
1991-630. Consequently, the foundation managers' potential
liability under sec. 4941(a)(2) is still at issue in this case.
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