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TITLE 26-INTERNAL REVENUE CODE each taxable year are normally not more than $5,000. (2) Exceptions by regulations The Secretary may by regulations exempt (to the extent and subject to such conditions as may be prescribed in such regulations) from the provisions of subsection (a) or (b) or both- (A) educational organizations described in section 170(b)(1)(A)(ii), and (B) any other class of organizations with respect to which the Secretary determines that full compliance with the provisions of subsections (a) and (b) is not necessary to the efficient administration of the provi- sions of this title relating to private founda- tions. (d) Disallowance of certain charitable, etc., deduc- tions (1) Gift or bequest to organizations subject to sec- tion 507(c) tax No gift or bequest made to an organization upon which the tax provided by section 507(c) has been imposed shall be allowed as a deduc- tion under section 170, 545(b)(2), 556(b)(2), 642(c), 2055, 2106(a)(2), or 2522, if such gift or bequest is made- (A) by any person after notification is made under section 507(a), or (B) by a substantial contributor (as de- fined in section 507(d)(2)) in his taxable year which includes the first day on which action is taken by such organization which culminates in the imposition of tax under section 507(c) and any subsequent taxable year. (2) Gift or bequest to taxable private foundation, section 4947 trust, etc. No gift or bequest made to an organization shall be allowed as a deduction under section 170, 545(b)(2), 556(b)(2), 642(c), 2055, 2106(a)(2), or 2522, if such gift or bequest is made- (A) to a private foundation or a trust de- scribed in section 4947 in a taxable year for which it fails to meet the requirements of subsection (e) (determined without regard to subsection (e)(2)), or (B) to any organization in a period for which it is not treated as an organization described in section 501(c)(3) by reason of subsection (a). (3) Exception Paragraph (1) shall not apply if the entire amount of the unpaid portion of the tax im- posed by section 507(c) is abated by the Secre- tary under section 507(g). (e) Governing instruments (1) General rule A private foundation shall not be exempt from taxation under section 501(a) unless its governing instrument includes provisions the effects of which are- (A) to require its income for each taxable year to be distributed at such time and in such manner as not to subject the founda- tion to tax under section 4942, and (B) to prohibit the foundation from en- gaging in any act of self-dealing (as defined in section 4941(d)), from retaining any excess business holdings (as defined in sec- tion 4943(c)), from making any investments in such manner as to subject the foundation to tax under section 4944, and from making any taxable expenditures (as defined in sec- tion 4945(d)). (2) Special rules for existing private foundations In the case of any organization organized before January 1, 1970, paragraph (1) shall not apply- (A) to any period after December 31, 1971, during the pendency of any judicial pro- ceeding begun before January 1, 1972, by the private foundation which is necessary to reform, or to excuse such foundation from compliance with, its governing instru- ment or any other instrument in order to meet the requirements of paragraph (1). and (B) to any period after the termination of any judicial proceeding described in subpar- agraph (A) during which its governing in- strument or any other instrument does not permit it to meet the requirements of para- graph (1). (Added Pub. L. 91-172, title I, § 101(a), Dec. 30, 1969, 83 Stat. 494, and amended Pub. L. 94-455, title XIX, §§ 1901(a)(71), (b)(8)(E), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1776, 1794, 1834.) AMENDMENTS 1976-Subsec. (a). Pub. L. 94-455, § 1901(a)(71)(A), struck out "For purposes of paragraph (2), the time prescribed for giving notice under this subsection shall not expire before the 90th day after the day on which regulations first prescribed under this subsection become final." following "under this subsection". Subsecs. (a)(1), (2). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" in three places following "Secretary". Subsec. (b). Pub. L. 94-455, §§ 190.(a)(71)(A), 1906(b)(13)(A), struck out "or his delegate" in two places following "Secretary" and "The time prescribed for giving notice under this subsection shall not expire before the 90th day after the day on which regula- tions first prescribed under this subsection become final" following "a private foundation". Subsec. (c)(2). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (c)(2)(A). Pub. L. 94-455, § 1901(b)(8)(E), sub- stituted "(A) educational organizations described in section 170(b)(1)(A)(ii), and" for "(A) educational or- ganizations which normally maintain a regular faculty and cirriculum and normally have a regularly enrolled body of pupils or students in attendance at the place where their educational activities are regularly carried on; and" following "(b) or both-". Subsee. (c)(2)(B). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (d)(2)(A). Pub. L. 94-455, § 1901(a)(71)(C), substituted "(e)(2)" for "(e)(2)(B) and (C)" following "regard to subsection". Subsec. (d)(3). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (e)(2)(A). Pub. L. 94-455, § 1901(a)(71)(B), struck out subpar. (A) relating to taxable years begin- ning before 1972, and redesignated subpars. (B) and (C) as (A) and (B), respectively. Subsec. (e)(2)(B). Pub. L. 94-455, § 1901(a)(71)(B), re- designated former subpar. (C) as (B) and, as redesig- nated, substituted "(A)" for "(B)" following "described in subparagraph". Subsec. (e)(2)(C). Pub. L. 94-455, § 1901(a)(71)(B), re- designated former subpar. (C) as (B). Page 387 § 508