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(3) of section 509(a) describes what are termed supporting
organizations, sec. 1.509(a)-4(a)(5), Income Tax Regs., as
follows:
an organization which--
(A) is organized, and at all times thereafter is
operated, exclusively for the benefit of, to perform
the functions of, or to carry out the purposes of one
or more specified organizations described in paragraph
(1) or (2),
(B) is operated, supervised, or controlled by or
in connection with one or more organizations, described
in paragraph (1) or (2), and
(C) is not controlled directly or indirectly by
one or more disqualified persons (as defined in section
4946) other than foundation managers and other than one
or more organizations described in paragraph (1) or
(2); * * *
Paragraph (4) excepts entities involved exclusively in testing
for public safety.
As a practical matter, organizations classified as private
foundations are subject to an excise tax regime and to
deductibility limits on contributions not applicable to publicly
supported charities and other excepted entities. Secs. 170,
4940-4948. The rationale underlying this distinction, and its
relationship to supporting organizations in particular, has been
encapsulated by the Court of Appeals for the Seventh Circuit:
Public charities were excepted from private
foundation status on the theory that their exposure to
public scrutiny and their dependence on public support
would keep them from the abuses to which private
foundations were subject. Supporting organizations are
similarly excepted in so far as they are subject to the
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