Page:United States Statutes at Large Volume 120.djvu/1128

 PUBLIC LAW 109–280—AUG. 17, 2006

120 STAT. 1097

‘‘(4) DISQUALIFIED SUPPORTING ORGANIZATION.— ‘‘(A) IN GENERAL.—The term ‘disqualified supporting organization’ means, with respect to any distribution— ‘‘(i) any type III supporting organization (as defined in section 4943(f)(5)(A)) which is not a functionally integrated type III supporting organization (as defined in section 4943(f)(5)(B)), and ‘‘(ii) any organization which is described in subparagraph (B) or (C) if— ‘‘(I) the donor or any person designated by the donor for the purpose of advising with respect to distributions from a donor advised fund (and any related parties) directly or indirectly controls a supported organization (as defined in section 509(f)(3)) of such organization, or ‘‘(II) the Secretary determines by regulations that a distribution to such organization otherwise is inappropriate. ‘‘(B) TYPE I AND TYPE II SUPPORTING ORGANIZATIONS.— An organization is described in this subparagraph if the organization meets the requirements of subparagraphs (A) and (C) of section 509(a)(3) and is— ‘‘(i) operated, supervised, or controlled by one or more organizations described in paragraph (1) or (2) of section 509(a), or ‘‘(ii) supervised or controlled in connection with one or more such organizations. ‘‘(C) FUNCTIONALLY INTEGRATED TYPE III SUPPORTING ORGANIZATIONS.—An organization is described in this subparagraph if the organization is a functionally integrated type III supporting organization (as defined under section 4943(f)(5)(B)). ‘‘SEC. 4967. TAXES ON PROHIBITED BENEFITS.

Regulations.

26 USC 4967.

‘‘(a) IMPOSITION OF TAXES.— ‘‘(1) ON THE DONOR, DONOR ADVISOR, OR RELATED PERSON.— There is hereby imposed on the advice of any person described in subsection (d) to have a sponsoring organization make a distribution from a donor advised fund which results in such person or any other person described in subsection (d) receiving, directly or indirectly, a more than incidental benefit as a result of such distribution, a tax equal to 125 percent of such benefit. The tax imposed by this paragraph shall be paid by any person described in subsection (d) who advises as to the distribution or who receives such a benefit as a result of the distribution. ‘‘(2) ON THE FUND MANAGEMENT.—There is hereby imposed on the agreement of any fund manager to the making of a distribution, knowing that such distribution would confer a benefit described in paragraph (1), a tax equal to 10 percent of the amount of such benefit. The tax imposed by this paragraph shall be paid by any fund manager who agreed to the making of the distribution. ‘‘(b) EXCEPTION.—No tax shall be imposed under this section with respect to any distribution if a tax has been imposed with respect to such distribution under section 4958. ‘‘(c) SPECIAL RULES.—For purposes of subsection (a)—

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