Private Foundations

Preface

This is the third supplement to accompany the fourth edition of Private Foundations: Tax Law and Compliance. The book captures federal tax law developments through the close of 2013. This cumulative supplement covers these developments in the foundation context as of early fall 2017.

In the previous preface, we observed that matters had been relatively quiet on the private foundation and tax law compliance front. Not so this time around. We have feasted on some truly delightful private letter rulings. They are all reflected in this supplement but notable nods need to go the rulings finding that (1) a foundation could operate a program similar to that conducted by its related for-profit business without entailing unwarranted self-dealing; (2) a convoluted transaction that would have given rise to direct self-dealing was not, as structured, indirect self-dealing; (3) a grant by a foundation would give rise to indirect self-dealing (although that may not be correct; (4) grants by a foundation to, in part, support a coffee shop and a gift shop are forms of funding of functionally related businesses; (5) a foundation grant to a private operating foundation would not be a taxable expenditure (when it would have been), which was corrected; and (6) a foundation's program of providing technical assistance to nonprofit organizations in its community is not an unrelated business.

We have reported on a variety of other private letter rulings issued in the foundation context. These ...