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• Author: Bruce R. Hopkins
• Profession: Leading authority on the law of tax-exempt organizations
• Pages: 233-236

J

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jeofaile

A“jeofaile”isamistakemadebyalawyer,usuallyinthecourseoflitigation,andadmittedto

a court, such as by amendment to a pleading. This type of admission is infrequent.

jeopardizing investment

Aprivate foundati on cannot (without inc urring one or more sanctions) invest a ny amount

(income or principal)inamannerthatwouldjeopardizethecarryingoutofanyofitstax-

exempt functions (IRC §4944(a)(1)); investments of this nature are known as “jeopardizing

investments.” The statutory law is silent as to what constitutes this type of investment, other

than to exclude the program-related investment from the concept of j eopardizing invest-

ments. The tax regulations, however, state that an investment is considered to jeopardize the

carrying out of the exempt purposes of a privatefoundation if it is determined that the founda -

tion managers, in making the investment, failed to exercise ordinary business care and pru-

dence, under the facts and circumstances prevailing at the time the investment was made, in

providing fort he long-and short-term nancial needs of the private foundation to carry out its

exempt purposes. No categoryof investments is treated as a per se violation of these rules; how-

ever, the regulations list types or methods of investment that are scrutinized closely to deter-

mine whether the foundation managers have met the requisite standard of care and prudence.

[PF Chap. 8, §§ 1.4(g), 2.4(d), 15.1; EO §12.4(d); HC §5.10; SM pp. 89, 90].

jeopardy assessment

The IRS has the authority to make a “jeopardy assessment” in the income tax,estate tax,and

gift tax contexts (IRC §6861). This authority is triggered when the IRS determines that the

assessment or collection of a deciency i n one or more of these taxes wi ll be jeopardiz ed

by delay; this is accomplished by an immediate assessment of the tax(es) due, together with

interest, additional amounts, and additions to tax, coupled wit h a notice and demand for the

amounts due.

Bruce R. Hopkins’ Nonprot Law Dictionary, First Edition. Bruce R. Hopkins.

©2015 Bruce R. Hopkins. Published 2015 by John Wiley& S ons,Inc.