496
PUBLIC LAW 91-172-DEC. 30, 1969 ost,p. 517.
26^sc^'5o\^^* IL
" (A) to a private foundation or a trust described in section 4947 in a taxable year for which it fails to meet the requirements of subsection (e) (determined without regard to subsection (e)(2)(B) and (C)), or " (B) to any organization in a period for which it is not treated as an organization described in section 501(c)(3) by reason of subsection (a). "(3) EXCEPTION.—Paragraph (1) shall not apply if the entire amount of the unpaid portion of the tax imposed by section 507(c) is abated by the Secretary or his delegate under section 507(g). "(e)
Post, p. 502. Post, p. 500. Post,
p. 507.
Post, p. 5 1 1. Post, p. 513.
GOVERNING INSTRUMENTS.— " (1) GENERAL RULE.—A private
foundation shall not be exempt from taxation under section 501(a) unless its governing instrument includes provisions the effects of which are— " (A) to require its income for each taxable year to be distributed at such time and in such manner as not to subject the foundation to tax under section 4942, and " (B) to prohibit the foundation from engaging in any act of self-dealing (as defined in section 4941(d)), from retaining any excess business holdings (as defined in section 4943(c)), from making any investments in such manner as to subject the foundation to tax under section 4944, and from making any taxable expenditures (as defined in section 4945(d)). "(2)
Post, p. 550.
Post. p. 553.
SPECIAL
RULES FOR EXISTING
PRIVATE
FOUNDATIONS.—
I n the case of any organization organized before January 1, 1970, paragraph (1) shall not apply— " (A) to any taxable year beginning before January 1, 1972, '• " (B) to any period after December 31, 1971, during the pendency of any judicial proceeding begun before January 1, 1972, by the private foundation which is necessary to reform, iI or to excuse such foundation from compliance with, its governing instrument or any other instrument in order to meet the requirements of paragraph (1), and " (G) to any period after the termination of any judicial proceeding described in subparagraph (B) during which its governing instrument or any other instrument does not permit it to meet the requirements of paragraph (1). "SEC. 509. PRIVATE FOUNDATION DEFINED. " (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— ii(^i^ g^j^ organization described in section 170(b)(1)(A) (other than in clauses (vii) and ( v i i i)); " (2) an organization which— ,; " ( ^) normally receives more than one-third of its support in each taxable year from any combination of— "(1) gifts, grants, contributions, or membership fees, '^
54^°^ ^^' ^'*^'
[83 STAT.
"(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 1 7 0 (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,
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