509(a) GENERAL RULE. --
For purposes of this title, the term "private foundation"
means a domestic or foreign organization described in section
501(c)(3) other than --
509(a)(1) an organization described
in section 170(b)(1)(A) (other than in clauses (vii) and (viii));
509(a)(2) an organization which
--
509(a)(2)(A) normally receives
more than one-third of its support in each taxable year from
any combination of --
509(a)(2)(A)(i) gifts, grants,
contributions, or membership fees, and
509(a)(2)(A)(ii) gross receipts
from admissions, sales of merchandise, performance of services,
or furnishing of facilities, in an activity which is not an
unrelated trade or business (within the meaning of section 513),
not including such receipts from any person, or from any bureau
or similar agency of a governmental unit (as described in section
170(c)(1)), in any taxable year to the extent such receipts
exceed the greater of $5,000 or 1 percent of the organization's
support in such taxable year,
from persons other than disqualified persons
(as defined in section 4946) with respect to the organization,
from governmental units described in section 170(c)(1), or from
organizations described in section 170(b)(1)(A) (other than
in clauses (vii) and (viii)), and
509(a)(2)(B) normally receives
not more than one-third of its support in each taxable year
from the sum of --
509(a)(2)(B)(i) gross investment
income (as defined in subsection (e)) and
509(a)(2)(B)(ii) the excess
(if any) of the amount of the unrelated business taxable income
(as defined in section 512) over the amount of the tax imposed
by section 511;
509(a)(3) an organization which
--
509(a)(3)(A) is organized,
and at all times thereafter is operated, exclusively for the
benefit of, to perform the functions of, or to carry out the
purposes of one or more specified organizations described in
paragraph (1) or (2),
509(a)(3)(B) is --
509(a)(3)(B)(i) operated, supervised,
or controlled by one or more organizations described in paragraph
(1) or (2),
509(a)(3)(B)(ii) supervised
or controlled in connection with one or more such organizations,
or
509(a)(3)(B)(iii) operated
in connection with one or more such organizations, and
509(a)(3)(C) is not controlled
directly or indirectly by one or more disqualified persons (as
defined in section 4946) other than foundation managers and
other than one or more organizations described in paragraph
(1) or (2); and
509(a)(4) an organization which
is organized and operated exclusively for testing for public
safety.
For purposes of paragraph (3), an organization
described in paragraph (2) shall be deemed to include an organization
described in section 501(c)(4), (5), or (6) which would be described
in paragraph (2) if it were an organization described in section
501(c)(3).
509(b) CONTINUATION OF PRIVATE FOUNDATION
STATUS. --For purposes of this title, if an organization
is a private foundation (within the meaning of subsection (a))
on October 9, 1969, or becomes a private foundation on any subsequent
date, such organization shall be treated as a private foundation
for all periods after October 9, 1969, or after such subsequent
date, unless its status as such is terminated under section
507.
509(c) STATUS OF ORGANIZATION AFTER
TERMINATION OF PRIVATE FOUNDATION STATUS. --For purposes
of this part, an organization the status of which as a private
foundation is terminated under section 507 shall (except as
provided in section 507(b)(2)) be treated as an organization
created on the day after the date of such termination.
509(d) DEFINITION OF SUPPORT.
--For purposes of this part and chapter 42, the term "support"
includes (but is not limited to) --
509(d)(1) gifts, grants, contributions,
or membership fees,
509(d)(2) gross receipts from
admissions, sales of merchandise, performance of services, or
furnishing of facilities in any activity which is not an unrelated
trade or business (within the meaning of section 513),
509(d)(3) net income from unrelated
business activities, whether or not such activities are carried
on regularly as a trade or business,
509(d)(4) gross investment
income (as defined in subsection (e)),
509(d)(5) tax revenues levied
for the benefit of an organization and either paid to or expended
on behalf of such organization, and
509(d)(6) the value of services
or facilities (exclusive of services or facilities generally
furnished to the public without charge) furnished by a governmental
unit referred to in section 170(c)(1) to an organization without
charge.
Such term does not include any gain from the
sale or other disposition of property which would be considered
as gain from the sale or exchange of a capital asset, or the
value of exemption from any Federal, State, or local tax or
any similar benefit.
509(e) DEFINITION OF GROSS INVESTMENT
INCOME. --For purposes of subsection (d), the term
"gross investment income" means the gross amount of
income from interest, dividends, payments with respect to securities
loans (as defined in section 512(a)(5)), rents, and royalties,
but not including any such income to the extent included in
computing the tax imposed by section 511. Such term shall also
include income from sources similar to those in the preceding
sentence.
509(f) REQUIREMENTS FOR SUPPORTING ORGANIZATIONS.
--
509(f)(1) TYPE III SUPPORTING ORGANIZATIONS.
--For purposes of subsection (a)(3)(B)(iii), an organization
shall not be considered to be operated in connection with any
organization described in paragraph (1) or (2) of subsection
(a) unless such organization meets the following requirements:
509(f)(1)(A) RESPONSIVENESS.
--For each taxable year beginning after the date of the enactment
of this subsection, the organization provides to each supported
organization such information as the Secretary may require to
ensure that such organization is responsive to the needs or
demands of the supported organization.
509(f)(1)(B) FOREIGN SUPPORTED ORGANIZATIONS.
--
509(f)(1)(B)(i) IN GENERAL.
--The organization is not operated in connection with any supported
organization that is not organized in the United States.
509(f)(1)(B)(ii) TRANSITION RULE FOR
EXISTING ORGANIZATIONS. --If the organization is operated
in connection with an organization that is not organized in
the United States on the date of the enactment of this subsection,
clause (i) shall not apply until the first day of the third
taxable year of the organization beginning after the date of
the enactment of this subsection.
509(f)(2) ORGANIZATIONS CONTROLLED BY
DONORS. --
509(f)(2)(A) IN GENERAL. --For
purposes of subsection (a)(3)(B), an organization shall not
be considered to be --
509(f)(2)(A)(i) operated, supervised,
or controlled by any organization described in paragraph (1)
or (2) of subsection (a), or
509(f)(2)(A)(ii) operated in
connection with any organization described in paragraph (1)
or (2) of subsection (a),
if such organization accepts any gift or contribution
from any person described in subparagraph (B).
509(f)(2)(B) PERSON DESCRIBED.
--A person is described in this subparagraph if, with respect
to a supported organization of an organization described in
subparagraph (A), such person is --
509(f)(2)(B)(i) a person (other
than an organization described in paragraph (1), (2), or (4)
of section 509(a)) who directly or indirectly controls, either
alone or together with persons described in clauses (ii) and
(iii), the governing body of such supported organization,
509(f)(2)(B)(ii) a member of
the family (determined under section 4958(f)(4)) of an individual
described in clause (i), or
509(f)(2)(B)(iii) a 35-percent
controlled entity (as defined in section 4958(f)(3) by substituting
"persons described in clause (i) or (ii) of section 509(f)(2)(B)"
for "persons described in subparagraph (A) or (B) of paragraph
(1)" in subparagraph (A)(i) thereof).
509(f)(3) SUPPORTED ORGANIZATION.
--For purposes of this subsection, the term "supported
organization" means, with respect to an organization described
in subsection (a)(3), an organization described in paragraph
(1) or (2) of subsection (a) --
509(f)(3)(A) for whose benefit
the organization described in subsection (a)(3) is organized
and operated, or
509(f)(3)(B) with respect to
which the organization performs the functions of, or carries
out the purposes of.
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