Exempt organizations - Uncle Fed's Tax*Board

“specific project” and the foundation’s set-aside
of all its excess earnings for four years, for which
it files a timely justifying application with the Service,
will be treated as a qualifying distribution
under section 4942(g)(2), in applying the income
test prescribed by section 4942(j)(3)(A) for each
taxable year in which such earnings are set aside
and remain unexpended. §53.4942(a)–3. (Sec.
4942, ’86 Code.)
Rev. Rul. 74-450, 1974-2 C.B. 388.
214.76 Qualifying distributions; set-aside
amount. A private foundation may set aside, by
means of a bookkeeping entry, the amount by
which its minimum investment return for its
immediately preceding taxable year exceeds its
adjusted net income for that year. §53.4942(a)–3.
(Sec. 4942, ’86 Code.)
Rev. Rul. 78-148, 1978-1 C.B. 380.
214.77 Reliance on status of grantees. Guidelines
under which grant-making private foundations
will not be considered to be responsible for
substantial and material changes in the sources of
financial support of recipient organizations that
are described in sections 170(b)(1)(A)(vi) or
509(a)(2) of the Code. Rev. Proc. 81-6 amplified.
§§1.170A-9, 1.509(a)-3. (Sec. 601.105, S.P.R.;
Secs. 170, 509, ’86 Code.)
Rev. Proc. 89-23, 1989-1 C.B. 844.
214.78 Repayment of loan from corpus. A private
foundation that made an interest-free loan
from corpus to a public charity in a year in which
its distribution requirements had been met and that
continued to meet the distribution requirements
during the five-year adjustment period without
use of the excess of qualifying distributions
created by the loan is not required to include in its
gross income repayments on the loan and may
return the payments to corpus. §53.4942(a)–2.
(Sec. 4942, ’86 Code.)
Rev. Rul. 77-252, 1977-2 C.B. 390.
214.79 Returns; extension of time; status
pending. Conditions are updated and restated
under which certain private foundations will be
deemed to have reasonable cause for failure to
comply with requirements for filing of returns and
payment of taxes. The temporary relief from penalties
previously provided for organizations
awaiting determinations under section 509(a) or
170(b)(1)(A) is also extended. Rev. Proc. 72-31
superseded. §§1.501(c)(3)-1, 1.508-1,
1.509(a)-1, 1.6033-2, 1.6056-1, 301.6104-4,
301.6151-1, 301.6652-2. (Sec. 601.201, S.P.R.;
Secs. 501, 508, 509, 6011, 6033, 6056, 6104,
6151, 6651, 6652, ’86 Code.)
Rev. Proc. 79-8, 1979-1 C.B. 487.
214.80 Returns; extension of time for filing;
status pending. Certain organizations exempt
under section 501(c)(3) awaiting a determination
of their private foundation status under section
509 are granted an extension of time to file Part III
of Forms 990 and 990-AR until thirty days after
notification of status is received or six months
from the due date for filing these returns, whichever
occurs first. §1.6081–1. (Sec. 6081, ’86
Code.)
Rev. Rul. 71-236, 1971-1 C.B. 398.
214.81 Rulings; jeopardizing investments.
The Service cannot issue a ruling that use of a proposed
investment procedure by a private foundation
will preclude imposition of tax under the provisions
of section 4944. §53.4944–1. (Sec. 4944,
’86 Code.)
Rev. Rul. 74-316, 1974-2 C.B. 389.
214.82 Rulings; publicly supported organizations.
An organization described in section
501(c)(3) having a first taxable year consisting of
exactly eight months and that meets the requirements
of section 170(b)(1)(A)(vi) is entitled to a
ruling or determination letter that it is not a private
foundation. §1.170A-9. (Sec. 170, ’86 Code.)
Rev. Rul. 76-27, 1976-1 C.B. 64.
214.83 Rulings; publicly supported organizations.
The requirement of reg. 1.170A-9(e)(5)(i)
that an organization must have been in existence
for at least one taxable year consisting of at least
eight months in order to obtain a ruling or determination
letter that it is not a private foundation by
virtue of being described in sections 509(a)(1) and
170(b)(1)(A)(vi) does not apply to section
170(b)(1)(A)(iv) organizations. §§1.170A-9,
1.509(a)-2. (Secs. 170, 509; ’86 Code.)
Rev. Rul. 77-407, 1977-2 C.B. 77.
214.84 Rulings; publicly supported organizations;
extended advance ruling. A newly created
organization, exempt from tax under section
501(c)(3), that wishes to obtain an extended
advance ruling for purposes of determining
whether it will qualify as a publicly supported
organization must submit a request for the
extended advance ruling at the same time as its
request for an initial advance ruling. §§1.170A-9,
1.509(a)-3. (Secs. 170, 509; ’86 Code.)
Rev. Rul. 77-115, 1977-1 C.B. 154.
214.85 Rulings and determination letters;
grant-making procedures. Procedures are provided
for issuing rulings and determination, opinion,
notification, and information letters and for
entering into closing agreements on specific
issues in employee plans and exempt organization
matters. Rev. Proc. 80-24 superseded; Rev. Procs.
76-47 and 80–39 modified. Modified by Rev.
Proc. 83-41. (Sec. 601.201, S.P.R.)
Rev. Proc. 83-36, 1983-1 C.B. 763.
214.86 Rulings and determination letters;
procedures. Updated procedures are provided for
issuing rulings and determination letters on private
foundation status under section 509(a) and
operating foundation status under section
4942(j)(3) for organizations exempt from income
tax under section 501(c)(3). Rev. Procs. 73–7
superseded and 72–50 superseded in part. Supplemented
by Rev. Proc. 77–21. Modified by Rev.
Proc. 80-25. §§1.509(a)-1. (Sec. 601.201, S.P.R.;
Secs. 509, 4942, 4947, ’86 Code.)
Rev. Proc. 72–50, 1972–2 C.B. 830; Rev. Proc.
76-34, 1976-2 C.B. 656.
214.87 Rulings and determination letters;
procedures; appeals and protests. Procedures
are provided for applying for recognition of
exemption under section 501 and 521 and for
revoking or modifying exemption rulings and
determination letters. Rev. Proc. 80–25 superseded
and Rev. Proc. 76-34 modified.
§§1.170A-1, 1.501(a)-1, 1.509(a)-1, 1.521-1,
53.4942(b)-1, 1.9100-1. (Sec. 601.201, S.P.R.;
Secs. 170, 501, 509, 521, 4942, 7428, ’86 Code.)
Rev. Proc. 84-46, 1984-1 C.B. 541.
214.88 Self-dealing; church membership
dues of disqualified person. Payment by a private
foundation of a disqualified person’ s church membership
dues in order to maintain that per son’s
church membership is an act of self-dealing.
§53.4941(d)-2. (Sec. 4941, ’86 Code.)
Rev. Rul. 77-160, 1977-1 C.B. 351.
214.89 Self-dealing; contribution to public
charity. A contribution by a private foundation to
a public charity made on the condition that the
public charity change its name to that of a substantial
contributor to the foundation and agree not to
change the name again for 100 years does not
constitute an act of self-dealing. §53.4941(d)–2.
(Sec. 4941, ’86 Code.)
Rev. Rul. 73 -407, 1973-2 C.B. 383.
214.90 Self-dealing; different tax years. Adisqualified
person with a tax year differing from that
of the private foundation from which he borrows
Exempt organizations
money computes the initial tax on self-dealing
based upon his own tax year. §53.4941(a)-1. (Sec.
4941, ’86 Code.)
Rev. Rul. 75-391, 1975-2 C.B. 446.
214.91 Self-dealing; disqualified persons;
bond purchase. The purchase of a portion of a
bond issue on behalf of an exempt hospital by a
disqualified person with respect to a private
foundation that guaranteed the bonds except for
those sold to the disqualified person is not an act
of self-dealing. §53.4941(d)–1. (Sec. 4941, ’86
Code.)
Rev. Rul. 77-6, 1977-1 C.B. 350.
214.92 Self-dealing; disqualified persons
serving as trustees of grant recipient. A grant
authorized by an exempt private foundation to an
exempt hospital for modernization, replacement,
and expansion does not constitute an act of selfdealing
even though two individuals serve as trustees
of both organizations. Clarified by Rev. Rul.
82-136. §53.4941(d)-1. (Sec. 4941, ’56 Code.)
Rev. Rul. 75-42, 1975-1 C.B. 359.
214.93 Self-dealing; disqualified persons
serving as trustees of grant recipient. A grant by
a private foundation to a second private foundation
does not constitute an act of self-dealing
within the meaning of section 4941 even though a
banking institution serves as sole trustee of both
foundations. Rev. Rul. 75-42 clarified.
§53.4941(d)-1. (Sec. 4941, ’86 Code.)
Rev. Rul. 82-136, 1982-2 C.B. 300.
214.94 Self-dealing; educational program;
incidental benefit to disqualified person. A private
foundation made a grant to an exempt university
to establish an educational program providing
instruction in manufacturing engineering.
A corporation that is a disqualified person with
respect to the private foundation intends to hire
graduates of the new program and encourage its
employees to enroll in the program, but will not
receive preferential treatment in recruiting graduates
or enrolling its employees. The grant is not an
act of self-dealing. §53.4941(d)–1. (Sec. 4941, ’86
Code.)
Rev. Rul. 80-310, 1980-2 C.B. 319.
214.95 Self-dealing; excess business holdings.
In the proposed sale to a disqualified person of a
private foundation’s 15-percent interest in a corporation,
in which the foundation and all disqualified
persons with respect to the foundation have
combined holdings of 45 percent of the voting
stock as of May 26, 1969, the disqualified person
would be subject to the tax on self-dealing
imposed by section 4941 ; in a similar situation in
which the total combined holdings of the foundation
and disqualified persons are 55 percent, the
foundation has excess business holdings under
section 4943(c)(4), and section 101(1)(2)(B) of
the Tax Reform Act of 1969 would apply to except
the proposed sale from the provisions of section
4941. §53.4941(d)-4. (Sec. 4941, ’86 Code.)
Rev. Rul. 75-25, 1975-1 C.B. 359.
214.96 Self-dealing; exchange of securities;
former disqualified person. An act of self-dealing
will not result from the exchange of securities
between a private foundation and a corporation
that was previously a disqualified person by reason
of the ownership of more than 35 percent of its
total combined voting power by the former
foundation manager, who resigned 5 years prior to
the exchange, and who did not participate in planning
the exchange offer during the period of disqualification.
§§53.4941(d)-2, 53.4946-1. (Secs.
4941, 4946; ’86 Code.)
Rev. Rul. 76-448, 1976-2 C.B. 368.
214.97 Self-dealing; foundation and trust
with same trustee. A transaction in which a private
foundation purchased property from a testamentary
trust that is not a disqualified person with
respect to the foundation, both of which had the