*§ 21.9 REBUTTABLE PRESUMPTION OF REASONABLENESS
*p. 611, carryover paragraph, fifth line. Insert the board following the comma.
*p. 611, carryover paragraph, sixth line. Insert the board following second and.
§ 21.10 EXCISE TAX REGIME
p. 613. Insert as last paragraph:
In one instance, the IRS concluded that the first-tier excise tax due under these rules, in connection with an automatic excess benefit transaction, should not be abated, because the disqualified person (a limited liability company) did not exercise ordinary business care and prudence when it relied on the oral advice of a public charity's legal counsel.163.1 The IRS stated that the disqualified person failed to offer any evidence showing that its reliance on the advice of legal counsel was reasonable. There was no information about the lawyer's expertise, there was no evidence that the LLC provided necessary and accurate information to a lawyer, the LLC itself did not seek legal advice, there was no information indicating that the LLC considered legal advice when pursuing the transaction (a loan), and the LLC did not provide any facts indicating the circumstances that would tend to support a finding of reasonable cause.