Lapham Foundation, Inc. - Page 16




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                    (b) One or more members of the governing bodies of                
               the publicly supported organizations are also officers,                
               directors or trustees of, or hold other important                      
               offices in, the supporting organizations; or                           
                    (c) The officers, directors or trustees of the                    
               supporting organization maintain a close and continuous                
               working relationship with the officers, directors or                   
               trustees of the publicly supported organizations; and                  
                    (d) By reason of (a), (b), or (c) of this                         
               subdivision, the officers, directors or trustees of the                
               publicly supported organizations have a significant                    
               voice in the investment policies of the supporting                     
               organization, the timing of grants, the manner of                      
               making them, and the selection of recipients of such                   
               supporting organization, and in otherwise directing the                
               use of the income or assets of such supporting                         
               organization.  [Sec. 1.509(a)-4(i)(2)(ii), Income Tax                  
               Regs.]                                                                 
               The integral part test seeks to ensure that the supporting             
          organization “maintains a significant involvement in the                    
          operations of one or more publicly supported organizations and              
          such publicly supported organizations are in turn dependent upon            
          the supporting organization for the type of support which it                
          provides.”  Sec. 1.509(a)-4(i)(3)(i), Income Tax Regs.  Two                 
          alternative sets of criteria exist under the regulations for                
          satisfying this test.  Id.  The first alternative (sometimes                
          referred to for convenience by the parties (with different                  
          punctuation) and herein as the “but-for subtest”) is set forth in           
          section 1.509(a)-4(i)(3)(ii), Income Tax Regs.:                             
                    The activities engaged in for or on behalf of the                 
               publicly supported organizations are activities to                     
               perform the functions of, or to carry out the purposes                 
               of, such organizations, and, but for the involvement of                






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Last modified: May 25, 2011