83 STAT.] "(3)
PUBLIC LAW 9 1 - 1 7 2 - D E C. 30, 1969
519
TAXABLE YEARS AFFECTED.—
" (A) Except as provided in subparagraph (B), a foreign organization described in subsection (b) shall be denied Stat. 163. exemption from taxation under section 501(a) by reason of 68Au s e 501. 26 paragraph (1) for all taxable years beginning with the taxable year during which it is notified by the Secretary or his delegate that it has engaged in a prohibited transaction. The Pubiicati.3n in Secretary or his delegate shall publish such notice in the ^^'^^'^^^ Registe Federal Register on the day on which he so notifies such foreign organization. " (B) Under regulations prescribed by the Secretary or his delegate, any foreign organization described in subsection (b) which is denied exemption from taxation under section 501(a) by reason of paragraph (1) may, with respect to the second taxable year following the taxable year in which notice is given under subparagraph (A) (or any taxable year thereafter), file claim for exemption from taxation under section 501(a), If the Secretary or his delegate is satisfied that such organization will not knowingly again engage in a prohibited transaction, such organization shall not, with respect to taxable years beginning with the taxable year with respect to which such claim is filed, be denied exemption from taxation under section 501(a) by reason of any prohibited transaction which was engaged in before the date on which such notice was given under subparagraph (A). "(4)
DISALLOWANCE OF CERTAIN CHARITABLE DEDUCTIONS.—No
gift or bequest shall be allowed as a deduction under section 170, ^°^'i^^- ^'*^' 545(b)(2), 556(b)(2), 642(c), 2055, 2106(a)(2), or 2522, if ^^s, 560-562. made— " (A) to a foreign organization described in subsection (b) after the date on which the Secretary or his delegate publishes notice under paragraph (3)(A) that he has notified such organization that it has engaged in a prohibited transaction, and " (B) in a taxable year of such organization for which it is not exempt from taxation under section 501(a) by reason of paragraph (1)." (c) ASSESSABLE PENALTIES FOR REPEATED, OR W I L L F U L AND FLAGRANT, ACTS UNDER CHAPTER 42.—Subchapter B of chapter 68
(relating to assessable penalties) is amended by adding at the end thereof the following new section:
«„^f,^,^*f^^f^®'
80 Stat. 1560. "'"' 667126 USC 6683.
"SEC. 6684. ASSESSABLE PENALTIES WITH RESPECT TO LIABILITY FOR TAX UNDER CHAPTER 42. "If any person becomes liable for tax under any section of chapter 42 (relating to private foundations) by reason of any act or failure to act which is not due to reasonable cause and either— " (1) such person has theretofore been liable for tax under such chapter, or "(2) such act or failure to act is both willful and flagrant, then such person shall be liable for a penalty equal to the amount of such tax." (d)
p. 498.
INFORMATION RETURNS OF EXEMPT ORGANIZATIONS.—
(1) IN GENERAL.—Section 6033(a) (relating to information returns by exempt organizations) is amended to read as follows: "(a)
Ante,
ORGANIZATIONS REQUIRED To F I L E. —
" (1) IN GENERAL.—Except as provided in paragraph (2), every organization exempt from taxation under section 501(a) snail file an annual return, stating specifically the items of gross income,
SSA Stat. 741.
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