---
kind: "range"
citation: "26 C.F.R. §§ 1.508-1–1.508-3"
title: "26"
from: "1.508-1"
to: "1.508-3"
count: 3
url: "https://uscodex.org/cfr/26/1.508-1..1.508-3"
---

# §1.508-1. Notices.

- (a) **New organizations must notify the Commissioner that they are applying for recognition of section 501(c)(3) status—**
  - (1) **In general.** Except as provided in [subparagraph (3)](#a-3) of this paragraph, an organization that is organized after October 9, 1969, will not be treated as described in [section 501(c)(3)](/cfr/26/501.md?p=c-3):
    - (i) Unless such organization has given the Commissioner notice in the manner prescribed in [subparagraph (2)](#a-2) of this paragraph; or
    - (ii) For any period before the giving of such notice, unless such notice is given in the manner and within the time prescribed in [subparagraph (2)](#a-2) of this paragraph
  - (2) **Filing of notice.**
    - (i) For purposes of [paragraph (a)(1)](#a-1) of this section, except as provided in [paragraph (a)(3)](#a-3) of this section, an organization seeking exemption under [section 501(c)(3)](/cfr/26/501.md?p=c-3) must file the notice described in [section 508(a)](/cfr/26/508.md?p=a) within 15 months from the end of the month in which the organization was organized. Such notice is filed by submitting a properly completed and executed Form 1023 (or, if applicable, Form 1023-EZ) exemption application. Notice should be filed with the appropriate office as designated by the Commissioner in guidance published in the Internal Revenue Bulletin, forms, or instructions to the applicable forms. A request for extension of time for the filing of such notice should be submitted to such appropriate office. Such request may be granted if it demonstrates that additional time is required.
    - (ii) Although the information required by either Form 1023 or Form 1023-EZ must be submitted to satisfy the notice required by this section, the failure to supply, within the required time, all of the information required to complete such form is not alone sufficient to deny exemption from the date of organization to the date such complete information for such form is submitted by the organization. If the information that is submitted within the required time is incomplete, and the organization supplies the necessary additional information requested by the Commissioner within the additional time period allowed, the original notice will be considered timely.
    - (iii) For purposes of subdivision (i) of this subparagraph and [paragraph (b)(2)(i)](#b-2-i) of this section, an organization shall be considered organized on the date it becomes an organization described in [section 501(c)(3)](/cfr/26/501.md?p=c-3) (determined without regard to [section 508(a)](/cfr/26/508.md?p=a)).
    - (iv) Since a trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) is not an organization described in [section 501(c)(3)](/cfr/26/501.md?p=c-3), it is not required to file a notice described in [section 508(a)](/cfr/26/508.md?p=a).
    - (v) For the treatment of community trusts, and the trusts or funds comprising them, under [section 508](/cfr/26/508.md), see the special rules under [§ 1.170A-9(e)](/cfr/26/1.170A-9.md?p=e).
    - (vi) A foreign organization shall, for purposes of [section 508](/cfr/26/508.md), be treated in the same manner as a domestic organization, except that [section 508](/cfr/26/508.md) shall not apply to a foreign organization which is described in [section 4948(b)](/cfr/26/4948.md?p=b).
  - (3) **Exceptions from notice.**
    - (i) **Paragraphs (a) (1) and (2) of this section are inapplicable to the following organizations—** (a) Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church. See [§ 1.6033-2(h)](/cfr/26/1.6033-2.md?p=h) regarding the definition of integrated auxiliary of a church;

      (b) Any organization which is not a private foundation (as defined in [section 509(a)](/cfr/26/509.md?p=a)) and the gross receipts of which in each taxable year are normally not more than $5,000 (as described in subdivision (ii) of this subparagraph);

      (c) Subordinate organizations (other than private foundations) covered by a group exemption letter;

      (d) Solely for purposes of sections [507](/cfr/26/507.md), [508(d)(1)](/cfr/26/508.md?p=d-1), [508(d)(2)(A)](/cfr/26/508.md?p=d-2-A) and [508(d)(3)](/cfr/26/508.md?p=d-3), [508(e)](/cfr/26/508.md?p=e), [509](/cfr/26/509.md) and chapter 42, a trust described in [section 4947(a)(1)](/cfr/26/4947.md?p=a-1). (However, a trust described in [section 501(c)(3)](/cfr/26/501.md?p=c-3) which was organized after October 9, 1969, shall be exempt under [section 501(a)](/cfr/26/501.md?p=a) by reason of being described in [section 501(c)(3)](/cfr/26/501.md?p=c-3) only if it files such notice); and

      (e) Any other class of organization that the Commissioner from time to time excludes from the requirement of filing notice under [section 508(a)](/cfr/26/508.md?p=a).

    - (ii) For purposes of subdivision (i) (b) of this subparagraph and [paragraph (b)(7)(ii)](#b-7-ii) of this section, the gross receipts (as defined in subdivision (iii) of this subparagraph) of an organization are normally not more than $5,000 if:

      (a) During the first taxable year of the organization the organization has received gross receipts of $7,500 or less;

      (b) During its first 2 taxable years the aggregate gross receipts received by the organization are $12,000 or less; and

      (c) In the case of an organization which has been in existence for at least 3 taxable years, the aggregate gross receipts received by the organization during the immediately preceding 2 taxable years, plus the current year are $15,000 or less

    - (iii) For a definition of gross receipts for purposes of subdivision (i)(b) of this subparagraph and [paragraph (b)(7)(ii)](#b-7-ii) of this section, see [§ 1.6033-2(g)(4)](/cfr/26/1.6033-2.md?p=g-4).
  - (4) **Voluntary filings by new organizations excepted from filing notice.** Any organization excepted from the requirement of filing notice under [section 508(a)](/cfr/26/508.md?p=a) will be exempt from taxation under [section 501(c)(3)](/cfr/26/501.md?p=c-3) if it meets the requirements of that section, whether or not it files such notice. However, in order to establish its exemption with the Internal Revenue Service and receive a ruling or determination letter recognizing its exempt status, an organization excepted from the notice requirement by reason of [subparagraph (3)](#a-3) of this paragraph should file proof of its exemption in the manner prescribed in [§ 1.501(a)-1](/cfr/26/1.501..1.md).
- (b) **Presumption that old and new organizations are private foundations—**
  - (1) **In general.** Except as provided in [subparagraph (7)](#b-7) of this paragraph, any organization (including an organization in existence on October 9, 1969) which is described in [section 501(c)(3)](/cfr/26/501.md?p=c-3), and which does not notify the Commissioner within the time and in the manner prescribed in [subparagraph (2)](#b-2) that it is not a private foundation, will be presumed to be a private foundation.
  - (2) **Filing of notice.**
    - (i) Except as provided in [subparagraph (7)](#b-7) of this paragraph, an organization must file the notice described in [section 508(b)](/cfr/26/508.md?p=b) and [subparagraph (1)](#b-1) of this paragraph within 15 months from the end of the month in which such organization was organized, or before March 22, 1973, whichever comes later. See [paragraph (a)(2)(iii)](#a-2-iii) of this section, for rules pertaining to when an organization is organized.
    - (ii) Any organization filing notice under this paragraph that has received a ruling or determination letter from the Internal Revenue Service dated on or before July 13, 1970, recognizing its exemption from taxation under [section 501(c)(3)](/cfr/26/501.md?p=c-3) (or the corresponding provisions of prior law), shall file the notice described in [section 508(b)](/cfr/26/508.md?p=b) by submitting a properly completed and executed Form 4653, Notification Concerning Foundation Status.
    - (iii) The financial schedule on Form 4653 need be completed only if the organization is, or thinks it might be, described in [section 170(b)(1)(A)](/cfr/26/170.md?p=b-1-A) (iv) or (vi) or [section 509(a)(2)](/cfr/26/509.md?p=a-2).
    - (iv) Any organization filing notice under this [paragraph (b)(2)(iv)](#b-2-iv) shall file its notice by submitting a properly completed and executed Form 1023 (or, if applicable, Form 1023-EZ) and providing information that it is not a private foundation. The organization shall also submit all information required by the regulations under section [170](/cfr/26/170.md) or [509](/cfr/26/509.md) (whichever is applicable) necessary to establish recognition of its classification as an organization described in section [509(a)(1)](/cfr/26/509.md?p=a-1), [(2)](/cfr/26/509.md?p=a-2), [(3)](/cfr/26/509.md?p=a-3), or [(4)](/cfr/26/509.md?p=a-4). The notice required by this [paragraph (b)(2)(iv)](#b-2-iv) should be filed with the appropriate office as designated by the Commissioner in guidance published in the Internal Revenue Bulletin, forms, or instructions to the applicable forms.
    - (v) An extension of time for the filing of a notice under this [paragraph (b)(2)](#b-2) may be granted by the office with which the notice is filed upon timely request by the organization, if the organization demonstrates that additional time is required.
  - (3) **Effect of notice upon the filing organization.**
    - (i) The notice filed under this paragraph may not be relied upon by the organization so filing unless and until the Internal Revenue Service notifies the organization that it is an organization described in paragraph [(1)](#b-1), [(2)](#b-2), [(3)](#b-3), or [(4)](#b-4), of [section 509(a)](/cfr/26/509.md?p=a). For purposes of the preceding sentence, an organization that has filed notice under [section 508(b)](/cfr/26/508.md?p=b), and has previously received a ruling that it is an organization described in [section 170(b)(1)(A)](/cfr/26/170.md?p=b-1-A) (other than clauses (vii) and (viii) thereof), will be considered to have been notified by the Internal Revenue Service that it is an organization described in paragraph (1) of section 509(a) if (a) the facts and circumstances forming the basis for the issuance of such ruling have not substantially changed, and (b) the ruling issued under that section has not been revoked expressly or by a subsequent change of the law or regulations under which the ruling was issued.
    - (ii) If an organization has filed a notice under [section 508(b)](/cfr/26/508.md?p=b) stating that it is not a private foundation and designating only one paragraph of [section 509(a)](/cfr/26/509.md?p=a) under which it claims recognition of its classification (such as an organization described in [section 509(a)(2)](/cfr/26/509.md?p=a-2)), and if it has received a ruling or determination letter which recognizes that it is not a private foundation but which fails to designate the paragraph under [section 509(a)](/cfr/26/509.md?p=a) in which it is described, then such organization will be treated as described under the paragraph designated by it, until such ruling or determination letter is modified or revoked. The rule in the preceding sentence shall not apply to an organization which indicated that it does not know its status under [section 509(a)](/cfr/26/509.md?p=a) or which claimed recognition of its status under more than one paragraph of [section 509(a)](/cfr/26/509.md?p=a).
  - (4) **Effect of notice upon grantors or contributors to the filing organization.** In the case of grants, contributions, or distributions made prior to:
    - (i) In the case of community trusts, 6 months after the date on which corrective and clarifying regulations designated as [§ 1.170A-9(e)(10)](/cfr/26/1.170A-9.md?p=e-10) become final;
    - (ii) In the case of medical research organizations, 6 months after the date on which corrective and clarifying regulations designated as [§ 1.170A-9(b)(2)](/cfr/26/1.170A-9.md?p=b-2), become final, and
    - (iii) In all other cases, January 1, 1976, any organization which has properly filed the notice described in [section 508(b)](/cfr/26/508.md?p=b) prior to March 22, 1973 will not be treated as a private foundation for purposes of making any determination under the internal revenue laws with respect to a grantor, contributor or distributor (as for example, a private foundation distributing all of its net assets pursuant to a [section 507(b)(1)(A)](/cfr/26/507.md?p=b-1-A) termination) thereto, unless the organization is controlled directly or indirectly by such grantor, contributor or distributor, if by the 30th day after the day on which such notice is filed, the organization has not been notified by the Commissioner that the notice filed by such organization has failed to establish that such organization is not a private foundation. See [subparagraph (6)](#b-6) of this paragraph for the effect of an adverse notice by the Internal Revenue Service. For purposes of this subparagraph, an organization which has properly filed notice described in [section 508(b)](/cfr/26/508.md?p=b) prior to March 22, 1973, and which has claimed recognition of its status under only one paragraph of [section 509(a)](/cfr/26/509.md?p=a) in such notice, will be treated only for purposes of grantors, contributors or distributors as having the classification claimed in the notice if the provisions of this subparagraph are otherwise satisfied.
  - (5) **Statement that old and new organizations are operating foundations.**
    - (i) Any organization (including an organization in existence on October 9, 1969) which is described in [section 501(c)(3)](/cfr/26/501.md?p=c-3) may submit a statement, in the form and manner provided for notice in [subparagraph (2)](#b-2) of this paragraph, that it is an operating foundation (as defined in [section 4942(j)(3)](/cfr/26/4942.md?p=j-3)) and include in such statement:

      (a) Necessary supporting information as required by the regulations under [section 4942(j)(3)](/cfr/26/4942.md?p=j-3) to confirm such determination (including a statement identifying the clause of [section 4942(j)(3)(B)](/cfr/26/4942.md?p=j-3-B) that is applicable); and

      (b) A written declaration by the principal officer, manager, or authorized trustee that there is a reasonable basis in law and in fact that the organization so filing is an operating foundation, and that to the best of the knowledge and belief of such officer, manager or trustee, the information submitted is complete and correct.

    - (ii) The statement filed under this subparagraph may not be relied upon by the organization so filing unless and until the Internal Revenue Service notifies the organization that it is an operating foundation described in [section 4942(j)(3)](/cfr/26/4942.md?p=j-3).
    - (iii) In the case of grants, contributions, or distributions made prior to March 22, 1973, any organization which has properly filed the statement described in this subparagraph prior to such date will be treated as an operating foundation for purposes of making any determination under the internal revenue laws with respect to a grantor, contributor, or distributor thereto, unless the organization is controlled directly or indirectly by such grantor, contributor, or distributor, if by the 30th day after the day on which such statement is filed, the organization has not been notified by the Commissioner or his delegate that its statement has failed to establish that such organization is an operating foundation. See [subparagraph (6)](#b-6) of this paragraph for the effect of an adverse notice by the Internal Revenue Service.
  - (6) **Effect of notice by Internal Revenue Service concerning organization's notice or statement.** [Subparagraph (4)](#b-4) and subdivision (iii) of subparagrph (5) of this paragraph shall have no effect:
    - (i) With respect to a grantor, contributor, or distributor to any organization for any period after the date on which the Internal Revenue Service makes notice to the public (such as by publication in the Internal Revenue Bulletin) that a grantor, contributor, or distributor to such organization can no longer rely upon the notice or statement submitted by such organization; and
    - (ii) Upon any grant, contribution, or distribution made to an organization on or after the date on which a grantor, contributor, or distributor acquired knowledge that the Internal Revenue Service has given notice to such organization that its notice or statement has failed to establish that such organization either is not a private foundation, or is an operating foundation, as the case may be.
  - (7) **Exceptions from notice.** Subparagraphs [(1)](#b-1) and [(2)](#b-2) of this paragraph are inapplicable to the following organizations:
    - (i) Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men's or women's organization, religious school, mission society, or youth group;
    - (ii) Any organization which is not a private foundation (as defined in [section 509(a)](/cfr/26/509.md?p=a)) and the gross receipts of which in each taxable year are normally not more than $5,000 (as determined under [paragraph (a)(3)(ii)](#a-3-ii) of this section);
    - (iii) Subordinate organizations (other than private foundations) covered by a group exemption letter but only if the parent or supervisory organization submits a notice covering the subordinates;
    - (iv) Trusts described in [section 4947(a)(1)](/cfr/26/4947.md?p=a-1); and
    - (v) Any other class of organization that the Commissioner from time to time excludes from the notification requirements of [section 508(b)](/cfr/26/508.md?p=b).
  - (8) **Voluntary filings by organizations excepted from filing notice.** Any organization excepted from the requirement of filing notice under [section 508(b)](/cfr/26/508.md?p=b) by reason of subdivisions (i), (ii), and (v) of [subparagraph (7)](#b-7) of this paragraph may receive the benefits of [subparagraph (4)](#b-4) of this paragraph by filing such notice.
- (c) **Effective/applicability date.** Paragraphs [(a)(2)(i)](#a-2-i), [(a)(2)(ii)](#a-2-ii), [(b)(2)(iv)](#b-2-iv), and [(b)(2)(v)](#b-2-v) of this section apply on and after July 1, 2014.

# §1.508-2. Disallowance of certain charitable, etc., deductions.

- (a) **Gift or bequest to organizations subject to section 507(c) tax—**
  - (1) **General rule.** No gift or bequest made to an organization upon which the tax provided by [section 507(c)](/cfr/26/507.md?p=c) has been imposed shall be allowed as a deduction under section [170](/cfr/26/170.md), [545(b)(2)](/cfr/26/545.md?p=b-2), [556(b)(2)](/cfr/26/556.md?p=b-2), [642(c)](/cfr/26/642.md?p=c), [2055](/cfr/26/2055.md), [2106(a)(2)](/cfr/26/2106.md?p=a-2), or [2522](/cfr/26/2522.md), if such gift or bequest is made:
    - (i) By any person after notification has been made by the organization under [section 507(a)(1)](/cfr/26/507.md?p=a-1) or after notification has been made by the Commissioner under [section 507(a)(2)(B)](/cfr/26/507.md?p=a-2-B), or
    - (ii) By a substantial contributor (as defined in [section 507(d)(2)](/cfr/26/507.md?p=d-2)) in his taxable year which includes the first day on which action is taken by such organization which culminates in the imposition of tax under [section 507(c)](/cfr/26/507.md?p=c) and any subsequent taxable year
  - (2) **Exception.** [Subparagraph (1)](#a-1) of this paragraph shall not apply if the entire amount of the unpaid portion of the tax imposed by [section 507(c)](/cfr/26/507.md?p=c) is abated by the Commissioner under [section 507(g)](/cfr/26/507.md?p=g).
- (b) **Gift or bequest to taxable private foundation, section 4947 trust, etc.**
  - (1) **General rule.**
    - (i) Except as provided in [subparagraph (2)](#b-2) of this paragraph, no gift or bequest made to an organization shall be allowed as a deduction under section [170](/cfr/26/170.md), [545(b)(2)](/cfr/26/545.md?p=b-2), [556(b)(2)](/cfr/26/556.md?p=b-2), [642(c)](/cfr/26/642.md?p=c), [2055](/cfr/26/2055.md), [2106(a)(2)](/cfr/26/2106.md?p=a-2), or [2522](/cfr/26/2522.md), if such gift or bequest is made:

      (a) To a private foundation or a trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) in a taxable year for which it fails to meet the requirements of [section 508(e)](/cfr/26/508.md?p=e) (determined without regard to [section 508(e)(2)](/cfr/26/508.md?p=e-2) (B) and (C), or

      (b) To any organization in a period for which it is not treated as an organization described in [section 501(c)(3)](/cfr/26/501.md?p=c-3) by reason of [section 508(a)](/cfr/26/508.md?p=a).

    - (ii) For purposes of subdivision (i)(a) of this subparagraph the term taxable year refers to the taxable year of the donee or beneficiary organization. In the event a bequest is made to a private foundation or trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) which is not in existence at the date of the testator's death (but which is created under the terms of the testator's will), the term taxable year shall mean the first taxable year of the private foundation or trust.
    - (iii) For purposes of subdivision (i)(a) of this subparagraph, an organization does not fail to meet the requirements of [section 508(e)](/cfr/26/508.md?p=e) for a taxable year, unless it fails to meet such requirements for the entire year. Therefore, even if a donee organization fails to meet the requirements of [section 508(e)](/cfr/26/508.md?p=e) on the date it receives a grant from a donor, the donor's grant will not be disallowed by operation of [section 508(d)(2)(A)](/cfr/26/508.md?p=d-2-A) and subdivision (i)(a) of this subparagraph, if the organization meets the requirements of [section 508(e)](/cfr/26/508.md?p=e) (determined without regard to [section 508(e)(2)](/cfr/26/508.md?p=e-2) (B) or (C)) by the end of its taxable year.
    - (iv) No deduction will be disallowed under [section 508(d)(2)(A)](/cfr/26/508.md?p=d-2-A) with respect to a deduction under section [170](/cfr/26/170.md), [545(b)(2)](/cfr/26/545.md?p=b-2), [556(b)(2)](/cfr/26/556.md?p=b-2), [642(c)](/cfr/26/642.md?p=c), [2055](/cfr/26/2055.md), [2106(a)(2)](/cfr/26/2106.md?p=a-2), or [2522](/cfr/26/2522.md) if during the taxable year in question, the private foundation or trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) has instituted a judicial proceeding which is necessary to reform its governing instrument or other instrument in order to meet the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1). This subdivision shall not apply unless within a reasonable time such judicial proceedings succeed in so reforming such instrument.
    - (v) No deduction will be disallowed under [section 508(d)(2)(A)](/cfr/26/508.md?p=d-2-A) and subdivision (i)(a) of this subparagraph for any taxable year beginning before January 1, 1972, with respect to a private foundation or trust described in [section 4947](/cfr/26/4947.md) organized before January 1, 1970. See also [§ 1.508-3(g)](/cfr/26/1.508-3.md?p=g) regarding transitional rules for extending compliance with [section 508(e)(1)](/cfr/26/508.md?p=e-1).
    - (vi) (a) In the case of a contribution or bequest to a trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) other than to a trust to which subdivision (vii) of this subparagraph applies, no deduction shall be disallowed by reason of [section 508(d)(2)(A)](/cfr/26/508.md?p=d-2-A) on the grounds that such trust's governing instrument contains no provisions with respect to [section 4942](/cfr/26/4942.md). Similarly, if for a taxable year such trust is also a trust described in [section 4947(b)(3)](/cfr/26/4947.md?p=b-3), no deduction for such year shall be so disallowed on the grounds that the governing instrument contains no provision with respect to section [4943](/cfr/26/4943.md) or [4944](/cfr/26/4944.md).

      (b) This subdivision may be illustrated by the following example:

    - (vii) (a) In the case of a trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) which by its terms will become a trust described in [section 4947(a)(1)](/cfr/26/4947.md?p=a-1) and the governing instrument of which is executed after March 22, 1973, the governing instrument shall not meet the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1) if it does not contain provisions to the effect that the trust must comply with the provisions of [section 4942](/cfr/26/4942.md), or sections [4942](/cfr/26/4942.md), [4943](/cfr/26/4943.md), and [4944](/cfr/26/4944.md) (as the case may be) to the extent such section or sections shall become applicable to such trust.

      (b) This subdivision may be illustrated by the following example:

    - (viii) Since a charitable trust described in [section 4947(a)(1)](/cfr/26/4947.md?p=a-1) is not required to file a notice under [section 508(a)](/cfr/26/508.md?p=a), [section 508(d)(2)(B)](/cfr/26/508.md?p=d-2-B) and subdivision (i)(b) of this subparagraph are not applicable to such a trust.
  - (2) **Transitional rules.** Any deduction which would otherwise be allowable under section [642(c)(2)](/cfr/26/642.md?p=c-2), [2106(a)(2)](/cfr/26/2106.md?p=a-2), or [2055](/cfr/26/2055.md) shall not be disallowed under [section 508(d)(2)(A)](/cfr/26/508.md?p=d-2-A) if such deduction is attributable to:
    - (i) Property passing under the terms of a will executed on or before October 9, 1969,

      (a) If the decedent dies after October 9, 1969, but before October 9, 1972, without having amended any dispositive provision of the will after October 9, 1969, by codicil or otherwise,

      (b) If the decedent dies after October 9, 1969, and at no time after that date had the right to change the portions of the will which pertains to the passing of property to, or for the use of, an organization described in section [170(c)(2)(B)](/cfr/26/170.md?p=c-2-B) or [2055(a)](/cfr/26/2055.md?p=a), or

      (c) If no dispositive provision of the will is amended by the decedent, by codicil or otherwise, before October 9, 1972, and the decedent is on October 9, 1972, and at all times thereafter under a mental disability (as defined in [§ 1.642(c)-2(b)(3)(ii)](/cfr/26/1.642..2.md)) to amend the will by codicil or otherwise, or

    - (ii) Property transferred in trust on or before October 9, 1969,

      (a) If the grantor dies after October 9, 1969, but before October 9, 1972, without having amended, after October 9, 1969, any dispositive provision of the instrument governing the disposition of the property,

      (b) If the property transferred was an irrevocable interest to, or for the use of, an organization described in section [170(c)(2)(B)](/cfr/26/170.md?p=c-2-B) or [2055(a)](/cfr/26/2055.md?p=a),

      (c) In the case of a deduction under section [2106(a)(2)](/cfr/26/2106.md?p=a-2) or [2055](/cfr/26/2055.md); if no dispositive provision of the instrument governing the disposition of the property is amended by the grantor before October 9, 1972, and the grantor is on October 9, 1972, and at all times thereafter under a mental disability (as defined in [§ 1.642(c)-2(b)(3)(ii)](/cfr/26/1.642..2.md)) to change the disposition of the property, or

      (d) In the case of a deduction under [section 642(c)(2)(A)](/cfr/26/642.md?p=c-2-A), if the grantor is at all times after October 9, 1969, and up to, and including, the last day of the taxable year for which the deduction under such section is claimed, under a mental disability (as defined in [§ 1.642(c)-2(b)(3)(ii)](/cfr/26/1.642..2.md)) to change the terms of the trust


# §1.508-3. Governing instruments.

- (a) **General rule.** A private foundation shall not be exempt from taxation under [section 501(a)](/cfr/26/501.md?p=a) for a taxable year unless by the end of such taxable year its governing instrument includes provisions the effects of which are:
  - (1) To require distributions at such times and in such manner as not to subject the foundation to tax under [section 4942](/cfr/26/4942.md), and
  - (2) To prohibit the foundation from engaging in any act of self-dealing (as defined in [section 4941(d)](/cfr/26/4941.md?p=d)), from retaining any excess business holdings (as defined in [section 4943(c)](/cfr/26/4943.md?p=c)), from making any investments in such manner as to subject the foundation to tax under [section 4944](/cfr/26/4944.md), and from making any taxable expenditures (as defined in [section 4945(d)](/cfr/26/4945.md?p=d)).
- (b) **Effect and nature of governing instrument—**
  - (1) **In general.** Except as provided in [paragraph (d)](#d) of this section, the provisions of a foundation's governing instrument must require or prohibit, as the case may be, the foundation to act or refrain from acting so that the foundation, and any foundation managers or other disqualified persons with respect thereto, shall not be liable for any of the taxes imposed by sections 4941, 4942, 4943, 4944, and 4945 of the Code or, in the case of a split-interest trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2), any of the taxes imposed by those sections of chapter 42 made applicable under [section 4947](/cfr/26/4947.md). Specific reference to these sections of the Code will generally be required to be included in the governing instrument, unless equivalent language is used which is deemed by the Commissioner to have the same full force and effect. However, a governing instrument which contains only language sufficient to satisfy the requirements of the organizational test under [§ 1.501(c)(3)-1(b)](/cfr/26/1.501..1.md) will not be considered as meeting the requirements of this subparagraph, regardless of the interpretation placed on such language as a matter of law by a State court in a particular jurisdiction, unless the requirements of [paragraph (d)](#d) of this section are satisfied.
  - (2) **Corpus.** A governing instrument does not meet the requirements of [paragraph (a)(1)](#a-1) of this section if it expressly prohibits the distribution of capital or corpus.
  - (3) **Savings provisions.** For purposes of [sections 508(d)(2)](/cfr/26/508.md?p=d-2) (A) and (e), a governing instrument need not include any provision which is inconsistent with [section 101(l)](/cfr/26/101.md?p=l) (2), (3), (4), or (5) of the Tax Reform Act of 1969 (83 Stat. 533), as amended by sections 1301 and 1309 of the Tax Reform Act of 1976 (90 Stat. 1713, 1729), with respect to the organization. Accordingly, a governing instrument complying with the requirements of [subparagraph (1)](#b-1) of this paragraph may incorporate any savings provision contained in [section 101(l)](/cfr/26/101.md?p=l) (2), (3), (4), or (5) of the Tax Reform Act of 1969, as amended by sections 1301 and 1309 of the Tax Reform Act of 1976, as a specific exception to the general provisions of [paragraph (a)](#a) of this section. In addition, in the absence of any express provisions to the contrary, the exceptions contained in such savings provisions will generally be regarded as contained in a governing instrument meeting the requirements of [subparagraph (1)](#b-1) of this paragraph.
  - (4) **Excess holdings.** For purposes of [paragraph (a)(2)](#a-2) of this section, the prohibition against retaining any excess business holdings (as defined in [section 4943(c)](/cfr/26/4943.md?p=c)) shall be deemed only to prohibit the foundation from retaining any excess business holdings when such holdings would subject the foundation to tax under [section 4943(a)](/cfr/26/4943.md?p=a).
  - (5) **Revoked ruling on status.** In the case of an organization which:
    - (i) Has been classified as an organization described in [section 509(a)](/cfr/26/509.md?p=a) (1), (2), (3), or (4), and
    - (ii) Subsequently receives a ruling or determination letter stating that it is no longer described in [section 509(a)](/cfr/26/509.md?p=a) (1), (2), (3), or (4), but is a private foundation within the meaning of [section 509](/cfr/26/509.md),
  - (6) **Judicial proceeding.** For purposes of paragraphs [(a)](#a), [(b)(5)](#b-5), [(d)(2)](#d-2), and [(e)(3)](#e-3) of this section, an organization shall be deemed to have met the requirements of [section 508(e)](/cfr/26/508.md?p=e) within a year, if a judicial proceeding which is necessary to reform its governing instrument or other instrument is instituted within the year and within a reasonable time the organization, in fact, meets the requirements of [section 508(e)](/cfr/26/508.md?p=e). For purposes only of paragraphs [(b)(5)](#b-5), [(d)(2)](#d-2), and [(e)(3)](#e-3) of this section, if an organization organized before January 1, 1970, institutes such a judicial proceeding within such 1-year period, [section 508 (e)(2)(C)](/cfr/26/508.md?p=e-2-C) shall be applied as if such proceeding had been instituted prior to January 1, 1972.
- (c) **Meaning of governing instrument.** For purposes of [section 508(e)](/cfr/26/508.md?p=e), the term governing instrument shall have the same meaning as the term articles of organization under [§ 1.501(c)(3)-1(b)(2)](/cfr/26/1.501..1.md). The bylaws of an organization shall not constitute its governing instrument for purposes of [section 508(e)](/cfr/26/508.md?p=e).
- (d) **Effect of State law—**
  - (1) **In general.** A private foundation's governing instrument shall be deemed to conform with the requirements of [paragraph (a)](#a) of this section if valid provisions of State law have been enacted which:
    - (i) Require it to act or refrain from acting so as not to subject the foundation to the taxes imposed by [section 4941](/cfr/26/4941.md) (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 purpose), and 4945 (relating to taxable expenditures); or
    - (ii) **Treat the required provisions as contained in the foundation's governing instrument.**
  - (2) **Validity.**
    - (i) Any provision of State law described in [subparagraph (1)](#d-1) of this paragraph shall be presumed valid as enacted, and in the absence of State provisions to the contrary, to apply with respect to any foundation that does not specifically disclaim coverage under State law (either by notification to the appropriate State official or by commencement of judicial proceedings) except as provided in subdivisions (ii) and (iii) of this subparagraph.
    - (ii) If such provision is declared invalid or inapplicable with respect to a class of foundations by the highest appellate court of the State or by the Supreme Court of the United States, the foundations covered by the determination must meet the requirements of [section 508(e)](/cfr/26/508.md?p=e) within 1 year from the date on which the time for perfecting an application for review by the Supreme Court expires. If such application is filed, the requirements of [section 508(e)](/cfr/26/508.md?p=e) must be met within a year from the date on which the Supreme Court disposes of the case, whether by denial of the application for review or decision on the merits.
    - (iii) In addition, if such provision of State law is declared invalid or inapplicable with respect to a class of foundations by any court of competent jurisdiction which decision is not reviewed by a court referred to in subdivision (ii) of this subparagraph, and the Commissioner makes notice to the general public (such as by publication in the Internal Revenue Bulletin) that such provision has been so declared invalid or inapplicable, then all foundations in such State must meet the requirements of [section 508(e)](/cfr/26/508.md?p=e), without reliance upon such statute to the extent declared invalid or inapplicable by such decision, within 1 year from the date such notice is made public.
    - (iv) This subparagraph shall not apply to any foundation that is subject to a final judgment entered by a court of competent jurisdiction, holding the law invalid or inapplicable with respect to such foundation. See [paragraph (b)(6)](#b-6) of this section for the effect of certain judicial proceedings that are brought within 1 year.
  - (3) **Conflicting instrument.** For taxable years beginning after March 22, 1973 in order for a private foundation or trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) to receive the benefit of coverage under any State statute which makes applicable the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1) (A) and (B), where the statute by its terms does not apply to a governing instrument which contains a mandatory direction conflicting with any of such requirements, such organization must indicate on its annual return required to be filed under [section 6033](/cfr/26/6033.md) (or [section 6012](/cfr/26/6012.md) in the case of a trust described in [section 4947(a)](/cfr/26/4947.md?p=a)) that its governing instrument contains no mandatory directions which conflict with the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1) (A) or (B), as incorporated by the State statute. General language in a governing instrument empowering the trustee to make investments without being limited to those investments authorized by law will not be regarded as a mandatory conflicting direction.
  - (4) **Exclusion from statute.**
    - (i) For any taxable year beginning after March 22, 1973 in the case of a private foundation or trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) subject to a State statute which makes applicable the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1) (A) and (B) to the governing instruments of such organizations, other than those which take action to be excluded therefrom (such as by filing a notice of exclusion or by instituting appropriate judicial proceedings), an organization will receive the benefit of such State statute only if it indicates on its annual return required to be filed under [section 6033](/cfr/26/6033.md) (or [section 6012](/cfr/26/6012.md) in the case of a trust described in [section 4947(a)](/cfr/26/4947.md?p=a)) that it has not so taken action to be excluded.
    - (ii) This paragraph permits certain organizations that are subject to the provisions of such a State law, to avoid changing their governing instruments in order to meet the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1). Since an organization which avoids the application of a provision or provisions of State law, such as by filing a notice of exclusion, is not entitled to the benefits of this paragraph, such an organization must meet the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1) without regard to this paragraph and except as provided in [section 508(e)(2)(C)](/cfr/26/508.md?p=e-2-C) or [paragraph (g)(1)(iii)](#g-1-iii) of this section must change its governing instrument to the extent inconsistent with [section 508(e)(1)](/cfr/26/508.md?p=e-1).
  - (5) **Treatment of prevailing conflicting clause.** If provisions of State law are inapplicable to a clause in a governing instrument which is contrary to the provisions of [section 508(e)(1)](/cfr/26/508.md?p=e-1), the requirements of [section 508(e)(2)(C)](/cfr/26/508.md?p=e-2-C) and [paragraph (g)(1)(iii)](#g-1-iii) of this section are not satisfied by a provision of State law which purports to eliminate the need for litigation under such circumstances. Therefore, except as otherwise provided in this section unless the governing instrument is changed or litigation is commenced pursuant to [section 508(e)(2)(B)](/cfr/26/508.md?p=e-2-B) by an organization organized before January 1, 1970, or pursuant to [paragraph (g)(1)(ii)](#g-1-ii) of this section, to amend the nonconforming provision to meet the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1) (A) and (B), then pursuant to [section 508(e)](/cfr/26/508.md?p=e), such organization will not be exempt from taxation.
  - (6) **Retroactive application to grants or bequests.** If valid provisions of such a State law apply retroactively to a taxable year within which an organization has received a grant or request, [section 508(d)(2)(A)](/cfr/26/508.md?p=d-2-A) shall not apply so as to disallow such grant or bequest, but only if such valid provisions of State law are enacted within 2 years of such grant or bequest.
- (e) **Effect of section 508(e) upon section 4947 trusts—**
  - (1) **Section 4947(a)(1) trusts.** A charitable trust described in [section 4947(a)(1)](/cfr/26/4947.md?p=a-1) (unless also described in a paragraph of [section 509(a)](/cfr/26/509.md?p=a)) is subject to all the provisions of [paragraph (a)](#a) of this section.
  - (2) **Section 4947(a)(2) trusts.** A split-interest trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2), as long as it is so described, is subject to the provisions of [paragraph (a)(2)](#a-2) of this section, except to the extent that [section 4947](/cfr/26/4947.md) makes any such provisions inapplicable to certain trusts and certain amounts in trust. The governing instrument of a trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) may except amounts described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) (A), (B), and (C) from the requirements of [paragraph (a)(2)](#a-2) of this section. In the case of a trust having amounts transferred to it both before May 27, 1969, and after May 26, 1969, its governing instrument may except from the provisions of [paragraph (a)(2)](#a-2) of this section only those segregated amounts excluded from the application of [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) by reason of [section 4947(a)(2)(C)](/cfr/26/4947.md?p=a-2-C) and the regulations thereunder. Also, the governing instrument of such a trust may exclude the application of sections [4943](/cfr/26/4943.md) and [4944](/cfr/26/4944.md) for any period during which such trust is described in [section 4947(b)(3)](/cfr/26/4947.md?p=b-3) (A) or (B). See [§ 53.4947-1(c)](/cfr/26/53.4947-1.md?p=c) of this chapter for rules relating to the applicability of [section 4947](/cfr/26/4947.md) to split-interest trusts and [§ 1.508-2(b)(1)](/cfr/26/1.508-2.md?p=b-1) (vi) and (vii) for rules relating to the deductibility of grants or bequests to such trusts.
  - (3) **A section 4947(a)(2) trust becoming a section 4947(a)(1) trust.** If the governing instrument of a trust described in [section 4947(a)(2)](/cfr/26/4947.md?p=a-2) meets the applicable requirements of [paragraph (a)(2)](#a-2) of this section and such trust ceases to be so described and becomes instead a trust described in [section 4947(a)(1)](/cfr/26/4947.md?p=a-1), then such governing instrument must meet, prior to the end of 12 months from the date such trust first becomes described in [section 4947(a)(1)](/cfr/26/4947.md?p=a-1) (except as otherwise provided in this section) all the requirements of [paragraph (a)](#a) of this section in order to comply with [section 508(e)](/cfr/26/508.md?p=e).
- (f) **Special rules for existing private foundations.**
  - (1) Pursuant to [section 508(e)(2)](/cfr/26/508.md?p=e-2), [section 508(e)(1)](/cfr/26/508.md?p=e-1) and [paragraph (a)](#a) of this section shall not apply in the case of any organization whose governing instrument was executed before January 1, 1970:
    - (i) To any taxable year beginning before January 1, 1972;
    - (ii) To any period after December 31, 1971, during the pendency of any judicial proceeding begun before January 1, 1972, by the private foundation which is necessary to reform, or to excuse such foundation from compliance with, its governing instrument or any other instrument in order to meet the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1); and
    - (iii) To any period after the termination of any judicial proceeding described in subdivision (ii) of this subparagraph during which its governing instrument or any other instrument does not permit it to meet the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1).
  - (2) For purposes of [subparagraph (1)](#f-1) of this paragraph, and [§ 1.508-2(b)(1)(vi)(a)](/cfr/26/1.508-2.md?p=b-1-vi-a), a governing instrument will not be treated as executed before the applicable date, if, after such date the dispositive provisions of the instrument are amended (determined under rules similar to the rules set forth in [§ 20.2055-2(e)(4)](/cfr/26/20.2055-2.md?p=e-4) of this chapter).
  - (3) For purposes of [subparagraph (1)](#f-1) (ii) and (iii) of this paragraph, a private foundation will be treated as meeting the requirements of [section 508(e)(2)](/cfr/26/508.md?p=e-2) (B) and (C) if it has commenced a necessary and timely proceeding in an appropriate court of original jurisdiction and such court has ruled that the foundation's governing instrument or any other instrument does not permit it to meet the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1). Such foundation is not required to commence proceedings in any court of appellate jurisdiction in order to comply with [section 508(e)(2)(C)](/cfr/26/508.md?p=e-2-C). See also [§ 1.508-2(b)(2)](/cfr/26/1.508-2.md?p=b-2).
- (g) **Extension of time for compliance with section 508(e).**
  - (1) Except as provided in [subparagraph (2)](#g-2) of this paragraph, [section 508(e)(1)](/cfr/26/508.md?p=e-1) shall not apply to any private foundation (regardless of when organized) with respect:
    - (i) To any taxable year beginning before the transitional date,
    - (ii) To any period on or after the transitional date during the pendency of any judicial proceeding begun before the transitional date by the private foundation which is necessary to reform, or to excuse such foundation from compliance with, its governing instrument or any other instrument in order to meet the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1), and
    - (iii) To any period after the termination of any judicial proceeding described in subdivision (ii) of this subparagraph during which its governing instrument or any other instrument does not permit it to meet the requirements of [section 508(e)(1)](/cfr/26/508.md?p=e-1).
  - (2) [Subparagraph (1)](#g-1) of this paragraph shall apply only to gifts or bequests referred to in [section 508(d)(2)(A)](/cfr/26/508.md?p=d-2-A) that are made before the transitional date.
  - (3) For purposes of this paragraph the term transitional dates means the earlier of the following dates:
    - (i) In the case of a medical research organization, May 21, 1976 or in the case of a community trust February 10, 1977, or
    - (ii) The 91st day after the date an organization receives a final ruling or determination letter that it is a private foundation under [section 509(a)](/cfr/26/509.md?p=a).