
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 106-554 Section 1(a)(7)]
[CITE: 26USC4946]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                 Subtitle D--Miscellaneous Excise Taxes
 
     CHAPTER 42--PRIVATE FOUNDATIONS; AND CERTAIN OTHER TAX-EXEMPT 
                              ORGANIZATIONS
 
                    Subchapter A--Private Foundations
 
Sec. 4946. Definitions and special rules


(a) Disqualified person

                           (1) In general

        For purposes of this subchapter, the term ``disqualified 
    person'' means, with respect to a private foundation, a person who 
    is--
            (A) a substantial contributor to the foundation,
            (B) a foundation manager (within the meaning of subsection 
        (b)(1)),
            (C) an owner of more than 20 percent of--
                (i) the total combined voting power of a corporation,
                (ii) the profits interest of a partnership, or
                (iii) the beneficial interest of a trust or 
            unincorporated enterprise,

        which is a substantial contributor to the foundation,
            (D) a member of the family (as defined in subsection (d)) of 
        any individual described in subparagraph (A), (B), or (C),
            (E) a corporation of which persons described in subparagraph 
        (A), (B), (C), or (D) own more than 35 percent of the total 
        combined voting power,
            (F) a partnership in which persons described in subparagraph 
        (A), (B), (C), or (D) own more than 35 percent of the profits 
        interest,
            (G) a trust or estate in which persons described in 
        subparagraph (A), (B), (C), or (D) hold more than 35 percent of 
        the beneficial interest,
            (H) only for purposes of section 4943, a private 
        foundation--
                (i) which is effectively controlled (directly or 
            indirectly) by the same person or persons who control the 
            private foundation in question, or
                (ii) substantially all of the contributions to which 
            were made (directly or indirectly) by the same person or 
            persons described in subparagraph (A), (B), or (C), or 
            members of their families (within the meaning of subsection 
            (d)), who made (directly or indirectly) substantially all of 
            the contributions to the private foundation in question, and

            (I) only for purposes of section 4941, a government official 
        (as defined in subsection (c)).

                    (2) Substantial contributors

        For purposes of paragraph (1), the term ``substantial 
    contributor'' means a person who is described in section 507(d)(2).

                          (3) Stockholdings

        For purposes of paragraphs (1)(C)(i) and (1)(E), there shall be 
    taken into account indirect stockholdings which would be taken into 
    account under section 267(c), except that, for purposes of this 
    paragraph, section 267(c)(4) shall be treated as providing that the 
    members of the family of an individual are the members within the 
    meaning of subsection (d).

                      (4) Partnerships; trusts

        For purposes of paragraphs (1)(C)(ii) and (iii), (1)(F), and 
    (1)(G), the ownership of profits or beneficial interests shall be 
    determined in accordance with the rules for constructive ownership 
    of stock provided in section 267(c) (other than paragraph (3) 
    thereof), except that section 267(c)(4) shall be treated as 
    providing that the members of the family of an individual are the 
    members within the meaning of subsection (d).

(b) Foundation manager

    For purposes of this subchapter, the term ``foundation manager'' 
means, with respect to any private foundation--
        (1) an officer, director, or trustee of a foundation (or an 
    individual having powers or responsibilities similar to those of 
    officers, directors, or trustees of the foundation), and
        (2) with respect to any act (or failure to act), the employees 
    of the foundation having authority or responsibility with respect to 
    such act (or failure to act).

(c) Government official

    For purposes of subsection (a)(1)(I) and section 4941, the term 
``government official'' means, with respect to an act of self-dealing 
described in section 4941, an individual who, at the time of such act, 
holds any of the following offices or positions (other than as a 
``special Government employee'', as defined in section 202(a) of title 
18, United States Code):
        (1) an elective public office in the executive or legislative 
    branch of the Government of the United States,
        (2) an office in the executive or judicial branch of the 
    Government of the United States, appointment to which was made by 
    the President,
        (3) a position in the executive, legislative, or judicial branch 
    of the Government of the United States--
            (A) which is listed in schedule C of rule VI of the Civil 
        Service Rules, or
            (B) the compensation for which is equal to or greater than 
        the lowest rate of basic pay for the Senior Executive Service 
        under section 5382 of title 5, United States Code,

        (4) a position under the House of Representatives or the Senate 
    of the United States held by an individual receiving gross 
    compensation at an annual rate of $15,000 or more,
        (5) an elective or appointive public office in the executive, 
    legislative, or judicial branch of the government of a State, 
    possession of the United States, or political subdivision or other 
    area of any of the foregoing, or of the District of Columbia, held 
    by an individual receiving gross compensation at an annual rate of 
    $20,000 or more,
        (6) a position as personal or executive assistant or secretary 
    to any of the foregoing, or
        (7) a member of the Internal Revenue Service Oversight Board.

(d) Members of family

    For purposes of subsection (a)(1), the family of any individual 
shall include only his spouse, ancestors, children, grandchildren, great 
grandchildren, and the spouses of children, grandchildren, and great 
grandchildren.

(Added Pub. L. 91-172, title I, Sec. 101(b), Dec. 30, 1969, 83 Stat. 
515; amended Pub. L. 95-227, Sec. 4(c)(2)(B), Feb. 10, 1978, 92 Stat. 
22; Pub. L. 98-369, div. A, title III, Sec. 306(a), July 18, 1984, 98 
Stat. 784; Pub. L. 99-514, title XVI, Sec. 1606(a), Oct. 22, 1986, 100 
Stat. 2771; Pub. L. 105-206, title I, Sec. 1101(c)(1), July 22, 1998, 
112 Stat. 696; Pub. L. 106-554, Sec. 1(a)(7) [title III, Sec. 319(16)], 
Dec. 21, 2000, 114 Stat. 2763, 2763A-647.)


                               Amendments

    2000--Subsec. (c)(3)(B). Pub. L. 106-554 substituted ``the lowest 
rate of basic pay for the Senior Executive Service under section 5382'' 
for ``the lowest rate of compensation prescribed for GS-16 of the 
General Schedule under section 5332''.
    1998--Subsec. (c)(7). Pub. L. 105-206 added par. (7).
    1986--Subsec. (c)(5). Pub. L. 99-514 substituted ``$20,000'' for 
``$15,000''.
    1984--Subsec. (d). Pub. L. 98-369 amended subsec. (d) generally, 
substituting references to children, grandchildren, and great 
grandchildren for references to lineal descendants in two places.
    1978--Subsecs. (a)(1), (b). Pub. L. 95-227 substituted 
``subchapter'' for ``chapter''.


                    Effective Date of 1986 Amendment

    Section 1606(b) of Pub. L. 99-514 provided that: ``The amendment 
made by this section [amending this section] shall apply to compensation 
received after December 31, 1985.''


                    Effective Date of 1984 Amendment

    Section 306(c) of Pub. L. 98-369 provided that: ``The amendments 
made by this subsection [probably should be ``section'', amending this 
section and section 6104 of this title] shall take effect on January 1, 
1985.''


                    Effective Date of 1978 Amendment

    Amendment by Pub. L. 95-227 applicable with respect to 
contributions, acts, and expenditures made after Dec. 31, 1977, in and 
for taxable years beginning after such date, see section 4(f) of Pub. L. 
95-227, set out as an Effective Date note under section 192 of this 
title.

                  Section Referred to in Other Sections

    This section is referred to in sections 507, 509, 4940, 4941, 4942, 
4943, 4945, 4948, 4958, 6033, 7454 of this title.
