Rev. Rul. 71-547

The purpose of this Revenue Ruling is to identify those states that have been held by the Internal Revenue Service to have adopted legislation satisfying the requirements of section 508(e) of the Internal Revenue Code of 1954, relating to private foundations.

Under section 508(e) of the Code, a private foundation (as defined in section 509 of the Code) is not exempt under section 501(a) of the Code unless its governing instrument contains certain provisions. These provisions, generally, must require or prohibit, as the case may be, the foundation to act or refrain from acting so that it will not be liable for the taxes imposed by sections 4941, 4942, 4943, 4944, and 4945 of the Code.

Section 13.8(b) of the Temporary Income Tax Regulations under the Tax Reform Act of 1969, Public Law 91-172, C.B. 1969-3, 10, provides that a private foundation's governing instrument is deemed to have been so amended if valid provisions of State law have been enacted which: (1) Require it to act or refrain from acting so as not to subject the foundation to the taxes imposed by sections 4941 (relating to taxes on self-dealing), 4942 (relating to taxes on failure to distribute income), 4943 (relating to taxes on excess business holdings), 4944 (relating to taxes on investments which jeopardize charitable purposes), and 4945 (relating to taxable expenditures), or

(2) Treat the required provisions as contained in the foundation's governing instrument.

The States listed below have enacted statutory provisions that satisfy the requirements of section 508(e) of the Code. Therefore, the governing instruments of private foundations under the jurisdiction of these States are generally considered to have been amended as required by section 508(e) of the Code. However, provisions of these statutes vary widely. For this reason, the notations following the State listing are important.

DELAWARE--except for such private foundations which expressly provide in their governing instruments that the applicable sections of Delaware law do not apply to them.

GEORGIA--except for such private foundations which file a proper election not to be subject to such law.

MINNESOTA--except for private foundations that have been held by a court of competent jurisdiction not to be affected by such state statute.

MISSOURI--except for private foundations that have been held by a court of competent jurisdiction not to be affected by such state statute.

OKLAHOMA--except for such private foundations which file a proper election not to be subject to such law.

PENNSYLVANIA--with respect to private foundations described in section 509 of the Code and nonexempt charitable trusts described in section 4947(a)(1) of the Code, except as may otherwise be provided by decree of a court of competent jurisdiction.

TEXAS--except for such private foundations which file a proper election not to be subject to such law.

This Revenue Ruling will be updated periodically as additional rulings are issued.