B. Relevant Terms

(1) Correction: Defined in Section 4945(i)(1) as, with respect to any taxable

expenditure, (A) recovering part or all of the expenditure to the extent recovery is possible, and where full recovery is not possible such additional corrective action as is prescribed by the Secretary by regulations, or (B) in the case of a failure to comply with Section 4945(h)(2) or (3), obtaining or making the report in question.

(2) Expenditure Responsibility: Defined in Section 4945(h) as the private

foundation is responsible to exert all reasonable efforts and to establish adequate procedures:

a. To see that the grant is spent solely for the purpose for which made,

b. To obtain full and complete reports from the grantee on how the funds are

spent, and

c. To make full and detailed reports with respect to such expenditures to the

Secretary.

(3) Taxable Expenditure: Defined in Section 4945(d) as any amount paid or

incurred by a private foundation:

9

a. To carry on propaganda, or otherwise to attempt, to influence legislation,

b. To influence the outcome of any specific public election, or to carry on, directly

or indirectly, any voter registration drive,

c. As a grant to an individual for travel, study, or other similar purposes by such

individual,

d. As a grant to an organization unless such organization is described in Section

509(a)(1) or Section 509(a)(2), is an organization described in Section 509(a)(3) (other than an organization described in clause (i) or (ii) of Section 4942(g)(4)(A)), is an exempt operating foundation, or the private foundation exercises expenditure responsibility with respect to such grant, or

e. For any purpose other than one specified in Section 170(c)(2)(B).

(4) Taxable Period: Defined in Section 4945(i)(2) as, with respect to any taxable

expenditure, the period beginning with the date on which the taxable expenditure occurs and ending on the earlier of (A) the date of mailing a notice of deficiency with respect to the tax imposed by Section 4945(a)(1) under Section 6212, or (B) the date on which the tax imposed by Section 4945(a)(1) is assessed.