Internal Revenue Code:Sec. 4943. Taxes on excess business holdings
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 42 - PRIVATE FOUNDATIONS; AND CERTAIN OTHER TAX-EXEMPT
ORGANIZATIONS
Subchapter A - Private Foundations
Statute
Sec. 4943. Taxes on excess business holdings
(a) Initial tax
(1) Imposition
There is hereby imposed on the excess business holdings of any
private foundation in a business enterprise during any taxable
year which ends during the taxable period a tax equal to 10
percent of the value of such holdings.
(2) Special rules
The tax imposed by paragraph (1) -
(A) shall be imposed on the last day of the taxable year, but
(B) with respect to the private foundation's holdings in any
business enterprise, shall be determined as of that day during
the taxable year when the foundation's excess holdings in such
enterprise were the greatest.
(b) Additional tax
In any case in which an initial tax is imposed under subsection
(a) with respect to the holdings of a private foundation in any
business enterprise, if, at the close of the taxable period with
respect to such holdings, the foundation still has excess business
holdings in such enterprise, there is hereby imposed a tax equal to
200 percent of such excess business holdings.
(c) Excess business holdings
For purposes of this section -
(1) In general
The term ''excess business holdings'' means, with respect to
the holdings of any private foundation in any business
enterprise, the amount of stock or other interest in the
enterprise which the foundation would have to dispose of to a
person other than a disqualified person in order for the
remaining holdings of the foundation in such enterprise to be
permitted holdings.
(2) Permitted holdings in a corporation
(A) In general
The permitted holdings of any private foundation in an
incorporated business enterprise are -
(i) 20 percent of the voting stock, reduced by
(ii) the percentage of the voting stock owned by all
disqualified persons.
In any case in which all disqualified persons together do not
own more than 20 percent of the voting stock of an incorporated
business enterprise, nonvoting stock held by the private
foundation shall also be treated as permitted holdings.
(B) 35 percent rule where third person has effective control of
enterprise
If -
(i) the private foundation and all disqualified persons
together do not own more than 35 percent of the voting stock
of an incorporated business enterprise, and
(ii) it is established to the satisfaction of the Secretary
that effective control of the corporation is in one or more
persons who are not disqualified persons with respect to the
foundation,
then subparagraph (A) shall be applied by substituting 35
percent for 20 percent.
(C) 2 percent de minimis rule
A private foundation shall not be treated as having excess
business holdings in any corporation in which it (together with
all other private foundations which are described in section
4946(a)(1)(H)) owns not more than 2 percent of the voting stock
and not more than 2 percent in value of all outstanding shares
of all classes of stock.
(3) Permitted holdings in partnerships, etc.
The permitted holdings of a private foundation in any business
enterprise which is not incorporated shall be determined under
regulations prescribed by the Secretary. Such regulations shall
be consistent in principle with paragraphs (2) and (4), except
that -
(A) in the case of a partnership or joint venture, ''profits
interest'' shall be substituted for ''voting stock'', and
''capital interest'' shall be substituted for ''nonvoting
stock'',
(B) in the case of a proprietorship, there shall be no
permitted holdings, and
(C) in any other case, ''beneficial interest'' shall be
substituted for ''voting stock''.
(4) Present holdings
(A)(i) In applying this section with respect to the holdings of
any private foundation in a business enterprise, if such
foundation and all disqualified persons together have holdings in
such enterprise in excess of 20 percent of the voting stock on
May 26, 1969, the percentage of such holdings shall be
substituted for ''20 percent,'' and for ''35 percent'' (if the
percentage of such holdings is greater than 35 percent), wherever
it appears in paragraph (2), but in no event shall the percentage
so substituted be more than 50 percent.
(ii) If the percentage of the holdings of any private
foundation and all disqualified persons together in a business
enterprise (or if the percentage of the holdings of the private
foundation in such enterprise) decreases for any reason, clause
(i) and subparagraph (D) shall, except as provided in the next
sentence, be applied for all periods after such decrease by
substituting such decreased percentage for the percentage held on
May 26, 1969, but in no event shall the percentage substituted be
less than 20 percent. For purposes of the preceding sentence,
any decrease in percentage holdings attributable to issuances of
stock (or to issuances of stock coupled with redemptions of
stock) shall be disregarded so long as -
(I) the net percentage decrease disregarded under this
sentence does not exceed 2 percent, and
(II) the number of shares held by the foundation is not
affected by any such issuance or redemption.
(iii) The percentage substituted under clause (i), and any
percentage substituted under subparagraph (D), shall be applied
both with respect to the voting stock and, separately, with
respect to the value of all outstanding shares of all classes of
stock.
(iv) In the case of any merger, recapitalization, or other
reorganization involving one or more business enterprises, the
application of clauses (i), (ii), and (iii) shall be determined
under regulations prescribed by the Secretary.
(B) Any interest in a business enterprise which a private
foundation holds on May 26, 1969, if the private foundation on
such date has excess business holdings, shall (while held by the
foundation) be treated as held by a disqualified person (rather
than by the private foundation) -
(i) during the 20-year period beginning on such date, if the
private foundation and all disqualified persons have more than
a 95 percent voting stock interest on such date,
(ii) except as provided in clause (i), during the 15-year
period beginning on such date, if the foundation and all
disqualified persons have more than a 75 percent voting stock
interest (or more than a 75 percent profits or beneficial
interest in the case of any unincorporated enterprise) on such
date or more than a 75 percent interest in the value of all
outstanding shares of all classes of stock (or more than a 75
percent capital interest in the case of a partnership or joint
venture) on such date, or
(iii) during the 10-year period beginning on such date, in
any other case.
(C) The 20-year, 15-year, and 10-year periods described in
subparagraph (B) for the disposition of excess business holdings
shall be suspended during the pendency of any judicial proceeding
by the private foundation which is necessary to reform, or to
excuse such foundation from compliance with, its governing
instrument or any other instrument (as in effect on May 26, 1969)
in order to allow disposition of such holdings.
(D)(i) If, at any time during the second phase, all
disqualified persons together have holdings in a business
enterprise in excess of 2 percent of the voting stock of such
enterprise, then subparagraph (A)(i) shall be applied by
substituting for ''50 percent'' the following: ''50 percent, of
which not more than 25 percent shall be voting stock held by the
private foundation''.
(ii) If, immediately before the close of the second phase,
clause (i) of this subparagraph did not apply with respect to a
business enterprise, then for all periods after the close of the
second phase subparagraph (A)(i) shall be applied by substituting
for ''50 percent'' the following: ''35 percent, or if at any time
after the close of the second phase all disqualified persons
together have had holdings in such enterprise which exceed 2
percent of the voting stock, 35 percent, of which not more than
25 percent shall be voting stock held by the private
foundation''.
(iii) For purposes of this subparagraph, the term ''second
phase'' means the 15-year period immediately following the
20-year, 15-year, or 10-year period described in subparagraph
(B), whichever applies, as modified by subparagraph (C).
(E) Clause (ii) of subparagraph (B) shall not apply with
respect to any business enterprise if before January 1, 1971, one
or more individuals who are substantial contributors (or members
of the family (within the meaning of section 4946(d)) of one or
more substantial contributors) to the private foundation and who
on May 26, 1969, held more than 15 percent of the voting stock of
the enterprise elect, in such manner as the Secretary may by
regulations prescribe, not to have such clause (ii) apply with
respect to such enterprise.
(5) Holdings acquired by trust or will
Paragraph (4) (other than subparagraph (B)(i)) shall apply to
any interest in a business enterprise which a private foundation
acquires under the terms of a trust which was irrevocable on May
26, 1969, or under the terms of a will executed on or before such
date, which are in effect on such date and at all times
thereafter, as if such interest were held on May 26, 1969, except
that the 15-year and 10-year periods prescribed in clauses (ii)
and (iii) of paragraph (4)(B) shall commence with respect to such
interest on the date of distribution under the trust or will in
lieu of May 26, 1969.
(6) 5-year period to dispose of gifts, bequests, etc.
Except as provided in paragraph (5), if, after May 26, 1969,
there is a change in the holdings in a business enterprise (other
than by purchase by the private foundation or by a disqualified
person) which causes the private foundation to have -
(A) excess business holdings in such enterprise, the interest
of the foundation in such enterprise (immediately after such
change) shall (while held by the foundation) be treated as held
by a disqualified person (rather than by the foundation) during
the 5-year period beginning on the date of such change in
holdings; or
(B) an increase in excess business holdings in such
enterprise (determined without regard to subparagraph (A)),
subparagraph (A) shall apply, except that the excess holdings
immediately preceding the increase therein shall not be
treated, solely because of such increase, as held by a
disqualified person (rather than by the foundation).
In any case where an acquisition by a disqualified person would
result in a substitution under clause (i) or (ii) of subparagraph
(D) of paragraph (4), the preceding sentence shall be applied
with respect to such acquisition as if it did not contain the
phrase ''or by a disqualified person'' in the material preceding
subparagraph (A).
(7) 5-year extension of period to dispose of certain large gifts
and bequests
The Secretary may extend for an additional 5-year period the
period under paragraph (6) for disposing of excess business
holdings in the case of an unusually large gift or bequest of
diverse business holdings or holdings with complex corporate
structures if -
(A) the foundation establishes that -
(i) diligent efforts to dispose of such holdings have been
made within the initial 5-year period, and
(ii) disposition within the initial 5-year period has not
been possible (except at a price substantially below fair
market value) by reason of such size and complexity or
diversity of such holdings,
(B) before the close of the initial 5-year period -
(i) the private foundation submits to the Secretary a plan
for disposing of all of the excess business holdings involved
in the extension, and
(ii) the private foundation submits the plan described in
clause (i) to the Attorney General (or other appropriate
State official) having administrative or supervisory
authority or responsibility with respect to the foundation's
disposition of the excess business holdings involved and
submits to the Secretary any response received by the private
foundation from the Attorney General (or other appropriate
State official) to such plan during such 5-year period, and
(C) the Secretary determines that such plan can reasonably be
expected to be carried out before the close of the extension
period.
(d) Definitions; special rules
For purposes of this section -
(1) Business holdings
In computing the holdings of a private foundation, or a
disqualified person (as defined in section 4946) with respect
thereto, in any business enterprise, any stock or other interest
owned, directly or indirectly, by or for a corporation,
partnership, estate, or trust shall be considered as being owned
proportionately by or for its shareholders, partners, or
beneficiaries. The preceding sentence shall not apply with
respect to an income or remainder interest of a private
foundation in a trust described in section 4947(a)(2), but only
if, in the case of property transferred in trust after May 26,
1969, such foundation holds only an income interest or only a
remainder interest in such trust.
(2) Taxable period
The term ''taxable period'' means, with respect to any excess
business holdings of a private foundation in a business
enterprise, the period beginning on the first day on which there
are excess holdings and ending on the earlier of -
(A) the date of mailing of a notice of deficiency with
respect to the tax imposed by subsection (a) under section 6212
in respect of such holdings, or
(B) the date on which the tax imposed by subsection (a) in
respect of such holdings is assessed.
(3) Business enterprise
The term ''business enterprise'' does not include -
(A) a functionally related business (as defined in section
4942(j)(4)), or
(B) a trade or business at least 95 percent of the gross
income of which is derived from passive sources.
For purposes of subparagraph (B), gross income from passive
sources includes the items excluded by section 512(b)(1), (2),
(3), and (5), and income from the sale of goods (including
charges or costs passed on at cost to purchasers of such goods or
income received in settlement of a dispute concerning or in lieu
of the exercise of the right to sell such goods) if the seller
does not manufacture, produce, physically receive or deliver,
negotiate sales of, or maintain inventories in such goods.
(4) Disqualified person
The term ''disqualified person'' (as defined in section
4946(a)) does not include a plan described in section 4975(e)(7)
with respect to the holdings of a private foundation described in
paragraphs (4) and (5) of subsection (c).
(e) Application of Tax to Donor Advised Funds.--
(1) In general.--For purposes of this section, a donor
advised fund (as defined in section 4966(d)(2)) shall be treated
as a private foundation.
(2) Disqualified person.--In applying this section to any
donor advised fund (as so defined), the term `disqualified
person' means, with respect to the donor advised fund, any
person who is--
(A) described in section 4966(d)(2)(A)(iii),
(B) a member of the family of an individual
described in subparagraph (A), or
(C) a 35-percent controlled entity (as defined in
section 4958(f)(3) by substituting `persons described in
subparagraph (A) or (B) of section 4943(e)(2)' for
`persons described in subparagraph (A) or (B) of
paragraph (1)' in subparagraph (A)(i) thereof).
(3) Present holdings.--For purposes of this subsection,
rules similar to the rules of paragraphs (4), (5), and (6) of
subsection (c) shall apply to donor advised funds (as so
defined), except that--
(A) `the date of the enactment of this subsection'
shall be substituted for `May 26, 1969' each place it
appears in paragraphs (4), (5), and (6), and
(B) `January 1, 2007' shall be substituted for
`January 1, 1970' in paragraph (4)(E).
(f) Application of Tax to Supporting Organizations.--
(1) In general.--For purposes of this section, an
organization which is described in paragraph (3) shall be
treated as a private foundation.
(2) Exception.--The Secretary may exempt the excess
business holdings of any organization from the application of
this subsection if the Secretary determines that such holdings
are consistent with the purpose or function constituting the
basis for its exemption under section 501.
(3) Organizations described.--An organization is described
in this paragraph if such organization is--
(A) a type III supporting organization (other than
a functionally integrated type III supporting
organization), or
(B) an organization which meets the requirements
of subparagraphs (A) and (C) of section 509(a)(3) and
which is supervised or controlled in connection with one
or more organizations described in paragraph (1) or (2)
of section 509(a), but only if such organization accepts
any gift or contribution from any person described in
section 509(f)(2)(B).
(4) Disqualified person.--
(A) In general.--In applying this section to any
organization described in paragraph (3), the term
`disqualified person' means, with respect to the
organization--
(i) any person who was, at any time during
the 5-year period ending on the date described in
subsection (a)(2)(A), in a position to exercise
substantial influence over the affairs of the
organization,
(ii) any member of the family (determined
under section 4958(f)(4)) of an individual
described in clause (i),
(iii) any 35-percent controlled entity (as
defined in section 4958(f)(3) by substituting
`persons described
in clause (i) or (ii) of section 4943(f)(4)(A)'
for `persons described in subparagraph (A) or (B)
of paragraph (1)' in subparagraph (A)(i) thereof),
(iv) any person described in section
4958(c)(3)(B), and
(v) any organization--
(I) which is effectively
controlled (directly or indirectly) by
the same person or persons who control
the organization 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 (B) or a member of the
family (within the meaning of section
4946(d)) of such a person.
(B) Persons described.--A person is described in
this subparagraph if such person is--
(i) a substantial contributor to the
organization (as defined in section
4958(c)(3)(C)),
(ii) an officer, director, or trustee of the
organization (or an individual having powers or
responsibilities similar to those of the officers,
directors, or trustees of the organization), or
(iii) 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 (as so defined)
to the organization.
(5) Type iii supporting organization; functionally
integrated type iii supporting organization.--For purposes of
this subsection--
(A) Type iii supporting organization.--The term
`type III supporting organization' means an organization
which meets the requirements of subparagraphs (A) and
(C) of section 509(a)(3) and which is operated in
connection with one or more organizations described in
paragraph (1) or (2) of section 509(a).
(B) Functionally integrated type iii supporting
organization.--The term `functionally integrated type
III supporting organization' means a type III supporting
organization which is not required under regulations
established by the Secretary to make payments to
supported organizations (as defined under section
509(f)(3)) due to the activities of the organization
related to performing the functions of, or carrying out
the purposes of, such supported organizations.
(6) Special rule for certain holdings of type iii
supporting organizations.--For purposes of this subsection, the
term `excess business holdings' shall not include any holdings
of a type III supporting organization in any business enterprise
if, as of November 18, 2005, the holdings were held (and at all
times thereafter, are held) for the benefit of the community
pursuant to the direction of a State attorney general or a State
official with jurisdiction over such organization.
(7) Present holdings.--For <<NOTE: Deadlines.>> purposes
of this subsection, rules similar to the rules of paragraphs
(4), (5), and (6) of subsection (c) shall apply to organizations
described in section 509(a)(3), except that--
(A) `the date of the enactment of this subsection'
shall be substituted for `May 26, 1969' each place it
appears in paragraphs (4), (5), and (6), and
(B) `January 1, 2007' shall be substituted for
`January 1, 1970' in paragraph (4)(E).
Sources
(Added Pub. L. 91-172, title I, Sec. 101(b), Dec. 30, 1969, 83
Stat. 507; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A),
Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96-596, Sec. 2(a)(1)(D),
(2)(C), (3)(C), (4)(B), Dec. 24, 1980, 94 Stat. 3469-3472; Pub. L.
98-369, div. A, title III, Sec. 307(a), 308(a), 309(a), 310(a),
314(c)(1), July 18, 1984, 98 Stat. 784, 785, 787.)
Miscellaneous
AMENDMENTS
2006 - Pension Protection Act of 2006 (P.L. 109-280)
SEC. 1243. EXCESS BUSINESS HOLDINGS OF SUPPORTING ORGANIZATIONS.
(a) In General.--Section 4943, as amended by this Act, <<NOTE: 26
USC 4943.>> is amended by adding at the end the following new
subsection:
``(f) Application of Tax to Supporting Organizations.--
``(1) In general.--For purposes of this section, an
organization which is described in paragraph (3) shall be
treated as a private foundation.
``(2) Exception.--The Secretary may exempt the excess
business holdings of any organization from the application of
this subsection if the Secretary determines that such holdings
are consistent with the purpose or function constituting the
basis for its exemption under section 501.
``(3) Organizations described.--An organization is described
in this paragraph if such organization is--
``(A) a type III supporting organization (other than
a functionally integrated type III supporting
organization), or
``(B) an organization which meets the requirements
of subparagraphs (A) and (C) of section 509(a)(3) and
which is supervised or controlled in connection with one
or more organizations described in paragraph (1) or (2)
of section 509(a), but only if such organization accepts
any gift or contribution from any person described in
section 509(f)(2)(B).
``(4) Disqualified person.--
``(A) In general.--In applying this section to any
organization described in paragraph (3), the term
`disqualified person' means, with respect to the
organization--
``(i) any person who was, at any time during
the 5-year period ending on the date described in
subsection (a)(2)(A), in a position to exercise
substantial influence over the affairs of the
organization,
``(ii) any member of the family (determined
under section 4958(f)(4)) of an individual
described in clause (i),
``(iii) any 35-percent controlled entity (as
defined in section 4958(f)(3) by substituting
`persons described
in clause (i) or (ii) of section 4943(f)(4)(A)'
for `persons described in subparagraph (A) or (B)
of paragraph (1)' in subparagraph (A)(i) thereof),
``(iv) any person described in section
4958(c)(3)(B), and
``(v) any organization--
``(I) which is effectively
controlled (directly or indirectly) by
the same person or persons who control
the organization 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 (B) or a member of the
family (within the meaning of section
4946(d)) of such a person.
``(B) Persons described.--A person is described in
this subparagraph if such person is--
``(i) a substantial contributor to the
organization (as defined in section
4958(c)(3)(C)),
``(ii) an officer, director, or trustee of the
organization (or an individual having powers or
responsibilities similar to those of the officers,
directors, or trustees of the organization), or
``(iii) 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 (as so defined)
to the organization.
``(5) Type iii supporting organization; functionally
integrated type iii supporting organization.--For purposes of
this subsection--
``(A) Type iii supporting organization.--The term
`type III supporting organization' means an organization
which meets the requirements of subparagraphs (A) and
(C) of section 509(a)(3) and which is operated in
connection with one or more organizations described in
paragraph (1) or (2) of section 509(a).
``(B) Functionally integrated type iii supporting
organization.--The term `functionally integrated type
III supporting organization' means a type III supporting
organization which is not required under regulations
established by the Secretary to make payments to
supported organizations (as defined under section
509(f)(3)) due to the activities of the organization
related to performing the functions of, or carrying out
the purposes of, such supported organizations.
``(6) Special rule for certain holdings of type iii
supporting organizations.--For purposes of this subsection, the
term `excess business holdings' shall not include any holdings
of a type III supporting organization in any business enterprise
if, as of November 18, 2005, the holdings were held (and at all
times thereafter, are held) for the benefit of the community
pursuant to the direction of a State attorney general or a State
official with jurisdiction over such organization.
``(7) Present holdings.--For <<NOTE: Deadlines.>> purposes
of this subsection, rules similar to the rules of paragraphs
(4), (5), and (6) of subsection (c) shall apply to organizations
described in section 509(a)(3), except that--
``(A) `the date of the enactment of this subsection'
shall be substituted for `May 26, 1969' each place it
appears in paragraphs (4), (5), and (6), and
``(B) `January 1, 2007' shall be substituted for
`January 1, 1970' in paragraph (4)(E).''.
2006 - Pension Protection Act of 2006 (P.L. 109-280)
SEC. 1233. EXCESS BUSINESS HOLDINGS OF DONOR ADVISED FUNDS.
(a) In General.--Section 4943 is amended by adding at the end the
following new subsection:
``(e) Application of Tax to Donor Advised Funds.--
``(1) In general.--For purposes of this section, a donor
advised fund (as defined in section 4966(d)(2)) shall be treated
as a private foundation.
``(2) Disqualified person.--In applying this section to any
donor advised fund (as so defined), the term `disqualified
person' means, with respect to the donor advised fund, any
person who is--
``(A) described in section 4966(d)(2)(A)(iii),
``(B) a member of the family of an individual
described in subparagraph (A), or
``(C) a 35-percent controlled entity (as defined in
section 4958(f)(3) by substituting `persons described in
subparagraph (A) or (B) of section 4943(e)(2)' for
`persons described in subparagraph (A) or (B) of
paragraph (1)' in subparagraph (A)(i) thereof).
``(3) Present holdings.--For purposes of this subsection,
rules similar to the rules of paragraphs (4), (5), and (6) of
subsection (c) shall apply to donor advised funds (as so
defined), except that--
``(A) `the date of the enactment of this subsection'
shall be substituted for `May 26, 1969' each place it
appears in paragraphs (4), (5), and (6), and
``(B) `January 1, 2007' shall be substituted for
`January 1, 1970' in paragraph (4)(E).''.
(b) Effective Date.--The <<NOTE: 26 USC 4943 note.>> amendment made
by this section shall apply to taxable years beginning after the date of
the enactment of this Act.
2006 - Pension Protection Act of 2006 (P.L. 109-280)
Section 1212(c) Taxes on Excess Business Holdings.--Section 4943(a)(1) (relating
to imposition) is amended by striking ``5 percent'' and inserting ``10
percent''.
1984 - Subsec. (c)(4)(A)(ii). Pub. L. 98-369, Sec. 308(a),
substituted ''For purposes of the preceding sentence, any decrease
in percentage holdings attributable to issuances of stock (or to
issuances of stock coupled with redemptions of stock) shall be
disregarded so long as (I) the net percentage decrease disregarded
under this sentence does not exceed 2 percent, and (II) the number
of shares held by the foundation is not affected by any such
issuance or redemption'' for ''For purposes of this clause, any
decrease in percentage holdings attributable to issuances of stock
(or to issuances of stock coupled with redemptions of stock) shall
be determined only as of the close of each taxable year of the
private foundation unless the aggregate of the percentage decreases
attributable to the issuances of stock (or such issuances and
redemptions) during such taxable year equals or exceeds 1
percent''.
Subsec. (c)(4)(B)(i). Pub. L. 98-369, Sec. 309(a), substituted
''the private foundation and all disqualified persons have'' for
''the private foundation has''.
Subsec. (c)(6). Pub. L. 98-369, Sec. 310(a), inserted following
subpar. (B) ''In any case where an acquisition by a disqualified
person would result in a substitution under clause (i) or (ii) of
subparagraph (D) of paragraph (4), the preceding sentence shall be
applied with respect to such acquisition as if it did not contain
the phrase 'or by a disqualified person' in the material preceding
subparagraph (A).''
Subsec. (c)(7). Pub. L. 98-369, Sec. 307(a), added par. (7).
Subsec. (d)(4). Pub. L. 98-369, Sec. 314(c)(1), added par. (4).
1980 - Subsec. (b). Pub. L. 96-596, Sec. 2(a)(1)(D), substituted
''taxable period'' for ''correction period''.
Subsec. (d)(2). Pub. L. 96-596, Sec. 2(a)(2)(C), substituted
provision ending the taxable period on the earlier of the date of
mailing of a notice of deficiency with respect to the tax imposed
by subsec. (a) of this section under section 6212 of this title in
respect to such holdings or the date on which the tax imposed by
subsec. (a) of this section in respect to such holdings is assessed
for provision ending the taxable period on the date of mailing the
notice of deficiency with respect to a tax imposed by subsec. (a)
of this section under section 6212 of this title in respect to such
holdings.
Subsec. (d)(3), (4). Pub. L. 96-596, Sec. 2(a)(3)(C), (4)(B),
redesignated par. (4) as (3), and in subpar. (A) of par. (3) as so
redesignated, substituted ''section 4942(j)(4)'' for ''section
4942(j)(5)'', and struck out par. (3), which defined correction
period, with respect to excess business holdings of a private
foundation in a business enterprise, as the period ending 90 days
after the date of mailing of a notice of deficiency with respect to
the tax imposed by subsec. (b) of this section under section 6212
of this title, extended by any period in which a deficiency cannot
be assessed under section 6213(a) of this title and any other
period which the Secretary determines is reasonable and necessary
to permit orderly disposition of such excess business holdings.
1976 - Subsecs. (c), (d). Pub. L. 94-455 struck out ''or his
delegate'' after ''Secretary'' wherever appearing.
EFFECTIVE DATE OF 2006 AMENDMENT
2006 - Pension Protection Act of 2006 (P.L. 109-280)
SEC. 1243. EXCESS BUSINESS HOLDINGS OF SUPPORTING ORGANIZATIONS.
(b) Effective Date.--The <<NOTE: 26 USC 4943 note.>> amendment made
by this section shall apply to taxable years beginning after the date of
the enactment of this Act.
EFFECTIVE DATE OF 2006 AMENDMENT
2006 - Pension Protection Act of 2006 (P.L. 109-280)
SEC. 1233(b) Effective Date.--The <<NOTE: 26 USC 4943 note.>> amendment made
by this section shall apply to taxable years beginning after the date of
the enactment of this Act.
EFFECTIVE DATE OF 1984 AMENDMENT
Section 307(b) of Pub. L. 98-369, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(1) In general. - The amendment made by subsection (a)
(amending this section) shall apply to business holdings with
respect to which the 5-year period described in section 4943(c)(6)
of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) ends on
or after November 1, 1983.
''(2) Transitional rule. - Any plan submitted to the Secretary of
the Treasury or his delegate on or before the 60th day after the
date of the enactment of this Act (July 18, 1984) shall be treated
as submitted before the close of the initial 5-year period referred
to in section 4943(c)(7)(B) of the Internal Revenue Code of 1986
(as added by subsection (a)).''
Section 308(b) of Pub. L. 98-369 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
increases and decreases occurring after the date of the enactment
of this Act (July 18, 1984).''
Section 309(b) of Pub. L. 98-369 provided that: ''The amendment
made by subsection (a) (amending this section) shall take effect as
if included in the amendment made by section 101(b) of the Tax
Reform Act of 1969 (section 101(b) of Pub. L. 91-172 which enacted
this section).''
Section 310(b) of Pub. L. 98-369 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
acquisitions after the date of the enactment of this Act (July 18,
1984).''
Section 314(c)(2) of Pub. L. 98-369 provided that: ''The
amendment made by paragraph (1) (amending this section) shall apply
with respect to taxable years beginning after the date of the
enactment of this Act (July 18, 1984).''
EFFECTIVE DATE OF 1980 AMENDMENT
For effective date of amendment by Pub. L. 96-596 with respect to
any first tier tax and to any second tier tax, see section 2(d) of
Pub. L. 96-596, set out as an Effective Date note under section
4961 of this title.
SAVINGS PROVISION
Applicability of section to private foundations, see section
101(l)(4) of Pub. L. 91-172, set out as a note under section 4940
of this title.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 150, 508, 537, 4946,
4947, 4963, 6213, 7422 of this title.
