Page:United States Statutes at Large Volume 83.djvu/521

 83 STAT. ]

PUBLIC LAW 91-172-DEC. 30, 1969

"(iii) such organization establishes to the satisfaction of the Secretary or his delegate (in such manner as the Secretary or his delegate may by regulations prescribe) immediately after the expiration of such 12-month or 60-month period that such organization has complied with clause (i). If an organization gives notice under subparagraph (B) (ii) of the commencement of a 60-month period and such organization fails to meet the requirements of paragraph (1), (2), or (3) of section 509(a) for the entire 60-month period, this part and chapter 42 shall not apply to such organization for any taxable year within such 60-month period for which it does meet such requirements. " (2) TRANSFEREE FOUNDATIONS.—For purposes of this part, in the case of a transfer of assets of any private foundation to another private foundation pursuant to any liquidation, merger, redemption, recapitalization, or other adjustment, organization, or reorganization, the transferee foundation shall not be treated as a newly created organization. "(c) IMPOSITION OF TAX.—There is hereby imposed on each organization which is referred to in subsection (a) a tax equal to the lower of— "(1) the amount which the private foundation substantiates by adequate records or other corroborating evidence as the aggregate tax benefit resulting from the section 501(c)(3) status of such foundation, or " (2) the value of the net assets of such foundation.

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" (d) AGGREGATE TAX BENEFIT.—

"(1) IN GENERAL.—For purposes of subsection (c), the aggregate tax benefit resulting from the section 501(c)(3) status of any private foundation is the sum of— " (A) the aggregate increases in tax under chapters 1, 11, and 12 (or the corresponding provisions of prior law) which 26 USC i, 2001, would have been imposed with respect to all substantial con- ^^°^' tributors to the foundation if deductions for all contributions made by such contributors to the foundation after February 28, 1913, had been disallowed, and " (B) the aggregate increases in tax under chapter 1 (or the corresponding provisions of prior law) which would have been imposed with respect to the income of the private foundation for taxable years beginning after December 31, 1912, if (i) it had not been exempt from tax under section 501(a) (or the corresponding provisions of prior law), and (ii) in the case of a trust, deductions under section 642(c) (or the Post, p. 558. corresponding provisions of prior law) had been limited to 20 percent of the taxable income of the trust (computed without the benefit of section 642(c) but with the benefit ofsectionl70(b)(l)(A.)),and _ _ Pos^ p. 550. " (C) interest on the increases in tax determined under subparagraphs (A) and (B) from the first date on which each such increase would have been due and payable to the date on which the organization ceases to be a private foundation. " (2) SUBSTANTIAL CONTRIBUTOR.—

" (A) DEFINITION.—For purposes of paragraph (1), the term 'substantial contributor' means any person who contributed or beq^ueathed an aggregate amount of more than $5,000 to the private foundation, if such amount is more than 2 percent of the total contributions and bequests received by the foundation before the close of the taxable year of the

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