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In addition, a substantial amount of the total support of
the supporting organization must go to those publicly supported
organizations which meet the attentiveness requirement. Sec.
1.509(a)-4(i)(3)(iii)(a), Income Tax Regs.
The phrase “substantially all of its income”, as used in the
integral part test, has been interpreted to mean 85 percent or
more of net income. Rev. Rul. 76-208, 1976-1 C.B. 161 (stating
that the terminology should be given the same meaning as in sec.
53.4942(b)-1(c), Foundation Excise Tax Regs.). Since petitioner
has indicated that it will distribute at least 85 percent of its
net annual income, we focus on the further criteria intended to
cultivate attentiveness.
With respect to the first method for ensuring attentiveness,
support significant in amount relative to the beneficiary’s total
support is generally the defining characteristic. Sec. 1.509(a)-
4(i)(3)(iii)(d), Income Tax Regs. By this standard, we conclude
that petitioner’s proposed contributions to AEF do not rise to
the requisite level. Anticipated annual contributions of
approximately $7,600 from petitioner, when measured against the
total annual contributions received by AEF of more than $7
million, are not sufficient to guarantee attentiveness.4
4 Although it is unclear how petitioner’s proposed “pledge”
of $207,733 would factor into the support calculation, we are
satisfied that its impact would not be material for purposes of
our conclusion on this issue.
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