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includes the "furnishing of goods, services, or facilities
between a private foundation and a disqualified person".
Sec. 4941(d)(1)(C). However, section 4941(d)(2) provides several
exceptions for certain arrangements that would otherwise
constitute self-dealing transactions. Specifically, section
4941(d)(2)(E) provides:
the payment of compensation (and the payment or reim-
bursement of expenses) by a private foundation to a
disqualified person for personal services which are
reasonable and necessary to carrying out the exempt
purpose of the private foundation shall not be an act
of self-dealing if the compensation (or payment or
reimbursement) is not excessive * * *
Throughout the years at issue, the Museum contracted with
GMC to perform general maintenance, janitorial, and custodial
functions. Respondent maintains that payments to GMC for
services performed are self-dealing transactions within the ambit
of section 4941(d)(1)(C). Petitioner replies that these
transactions fit within the exception in section 4941(d)(2)(E) as
"personal services" which are reasonable and necessary to carry
out the Museum's exempt functions. As might be expected,
respondent disagrees.
The resolution of this issue depends solely on whether or
not the functions that GMC performed fall within the definition
of "personal services" of section 4941(d)(2)(E). Before making
this determination, a review of the legislative history of
section 4941 is helpful.
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