"Knowing" agreement to taxable expenditure
A foundation manager is considered to have agreed to an expenditure knowing that it is a taxable expenditure only if he or she:
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Has actual knowledge of enough facts that, based only on these facts, the expenditure would be a taxable expenditure,
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Is aware that an expenditure under these circumstances may violate the federal tax law governing taxable expenditures, and
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Negligently fails to make reasonable attempts to determine whether the expenditure is a taxable expenditure, or is aware that it is in fact a taxable expenditure.
Having reason to know certain facts does not constitute knowing, except to the extent that it tends to prove actual knowledge.
Return to Life Cycle of a Private Foundation
Page Last Reviewed or Updated: 2012-08-14
