Opinion ID: 578700
Heading Depth: 2
Heading Rank: 3

Heading: Relevant Provisions of the Internal Revenue Code

Text: 8 TLTG's tax exempt status is not at issue in this appeal. TLTG challenges only the Tax Court's conclusion that TLTG is not a political subdivision within the meaning of § 170(b)(1)(A)(v). 9 TLTG is a § 501(c)(3) organization and any § 501(c)(3) organization is presumed to be a private foundation unless it qualifies under one of the exceptions to private foundation status listed in § 509(a). As long as an organization is classified as a private foundation, it is subject to certain excise taxes for self-dealing, speculative investing, lobbying, and other restricted activities. See 26 U.S.C. §§ 4940-4945 (1989). Tax exempt organizations that are classified as other than private foundations are not subject to the requirements of §§ 4940-4945. 10 Under § 509(a)(1), an organization described in § 170(b)(1)(A)(i)-(vi) is excepted from private foundation status. Subsection (v), the subsection TLTG seeks to avail itself of, requires by way of § 170(c)(1) that TLTG be a state, a possession of the United States, or any political subdivision of any of the foregoing.... Thus, to escape private foundation status by way of subsection (v), TLTG must be a political subdivision of the state of Texas.