
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC7428]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
                    CHAPTER 76--JUDICIAL PROCEEDINGS
 
        Subchapter B--Proceedings by Taxpayers and Third Parties
 
Sec. 7428. Declaratory judgments relating to status and 
        classification of organizations under section 501(c)(3), etc.
        

(a) Creation of remedy

    In a case of actual controversy involving--
        (1) a determination by the Secretary--
            (A) 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),
            (B) with respect to the initial classification or continuing 
        classification of an organization as a private foundation (as 
        defined in section 509(a)), or
            (C) with respect to the initial classification or continuing 
        classification of an organization as a private operating 
        foundation (as defined in section 4942(j)(3)), or

        (2) 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.

(b) Limitations

                           (1) Petitioner

        A pleading may be filed under this section only by the 
    organization the qualification or classification of which is at 
    issue.

              (2) Exhaustion of administrative remedies

        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.

                    (3) Time for bringing action

        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.

(c) Validation of certain contributions made during pendency of 
        proceedings

                           (1) In general

        If--
            (A) the issue referred to in subsection (a)(1) involves the 
        revocation of a determination that the organization is described 
        in section 170(c)(2),
            (B) a proceeding under this section is initiated within the 
        time provided by subsection (b)(3), and
            (C) either--
                (i) a decision of the Tax Court has become final (within 
            the meaning of section 7481), or
                (ii) a judgment of the district court of the United 
            States for the District of Columbia has been entered, or
                (iii) 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).

                           (2) Limitation

        Paragraph (1) shall apply only--
            (A) 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
            (B) 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)).

                            (3) Exception

        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.

(d) Subpoena power for district court for District of Columbia

    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.

(Added Pub. L. 94-455, title XIII, Sec. 1306(a), Oct. 4, 1976, 90 Stat. 
1717; amended Pub. L. 95-600, title VII, Sec. 701(dd)(2), Nov. 6, 1978, 
92 Stat. 2924; Pub. L. 97-164, title I, Sec. 152, Apr. 2, 1982, 96 Stat. 
46; Pub. L. 98-369, div. A, title X, Sec. 1033(b), July 18, 1984, 98 
Stat. 1039; Pub. L. 102-572, title IX, Sec. 902(b), Oct. 29, 1992, 106 
Stat. 4516.)


                            Prior Provisions

    A prior section 7428 was renumbered 7437 of this title.


                               Amendments

    1992--Subsec. (a). Pub. L. 102-572 substituted ``United States Court 
of Federal Claims'' for ``United States Claims Court'' and ``Court of 
Federal Claims'' for ``Claims Court'' in concluding provisions.
    Subsecs. (b)(2), (c)(1)(C)(iii). Pub. L. 102-572, Sec. 902(b)(2), 
substituted ``Court of Federal Claims'' for ``Claims Court''.
    1984--Subsec. (d). Pub. L. 98-369 added subsec. (d).
    1982--Subsecs. (a), (b)(2), (c)(1)(C)(iii). Pub. L. 97-164 
substituted ``Claims Court'' for ``Court of Claims''.
    1978--Subsec. (a). Pub. L. 95-600 inserted provision relating to 
change in qualification or classification.


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-572 effective Oct. 29, 1992, see section 
911 of Pub. L. 102-572, set out as a note under section 171 of Title 28, 
Judiciary and Judicial Procedure.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 applicable with respect to inquiries and 
examinations beginning after Dec. 31, 1984, see section 1033(d) of Pub. 
L. 98-369, set out as an Effective Date note under section 7611 of this 
title.


                    Effective Date of 1982 Amendment

    Amendment by Pub. L. 97-164 effective Oct. 1, 1982, see section 402 
of Pub. L. 97-164, set out as a note under section 171 of Title 28, 
Judiciary and Judicial Procedure.


                    Effective Date of 1978 Amendment

    Amendment by Pub. L. 95-600 effective as if included in this section 
at the time section was added to this title, see section 701(dd)(3) of 
Pub. L. 95-600, set out as a note under section 7476 of this title.


                             Effective Date

    Section 1306(c) of Pub. L. 94-455 provided that: ``The amendments 
made by this section [enacting this section and amending sections 7451, 
7459, 7470, and 7482 of this title, enacting section 1507 of Title 28, 
Judiciary and Judicial Procedure, and amending sections 1346 and 2201 of 
Title 28] shall apply with respect to pleadings filed with the United 
States Tax Court, the district court of the United States for the 
District of Columbia, or the United States Court of Claims more than 6 
months after the date of the enactment of this Act [Oct. 4, 1976] but 
only with respect to determinations (or requests for determinations) 
made after January 1, 1976.''

                  Section Referred to in Other Sections

    This section is referred to in sections 7451, 7459, 7482, 7611 of 
this title; title 28 sections 1346, 1507, 2201.
