Overview
The U.S. Tax Court issued an opinion yesterday in Parks v. Commissioner, holding in part that a private foundation (PF) and its manager (P) were liable for excise taxes under sections 4945(a)(1) and (2), respectively. During its taxable years ending November 30, 1997 through 2000, PF made cumulative expenditures of $639,073 to produce and broadcast 30- and 60-second radio messages. As the foundation’s manager, P agreed to the making of such expenditures. The IRS ultimately determined that the expenditures were “attempts to influence legislation and/or the opinion of the general public” and therefore taxable expenditures. In a division opinion issued yesterday, the Tax Court agreed with the IRS that PF and P owed excise taxes on radio messages that attempted to influence legislation. In addition, the Tax Court concluded that the application of section 4945 and the regulations thereunder to PF and P did not violate the First Amendment and that such regulations are not unconstitutionally vague.