[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.509(a)-7]

[Page 139]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.509(a)-7  Reliance by grantors and contributors to section 
509(a) (1), (2), and (3) organizations.

    (a) General rule. Once an organization has received a final ruling 
or determination letter classifying it as an organization described in 
section 509(a) (1), (2), or (3), the treatment of grants and 
contributions and the status of grantors and contributors to such 
organization under sections 170, 507, 545(b)(2), 556(b)(2), 642(c), 
4942, 4945, 2055, 2106(a)(2), and 2522 will not be affected by reason of 
a subsequent revocation by the service of the organization's 
classification as described in section 509(a) (1), (2), or (3) until the 
date on which notice of change of status is made to the public (such as 
by publication in the Internal Revenue Bulletin) or another applicable 
date, if any, specified in such public notice. In appropriate cases, 
however, the treatment of grants and contributions and the status of 
grantors and contributors to an organization described in section 509(a) 
(1), (2), or (3) may be affected pending verification of the continued 
classification of such organization under section 509(a) (1), (2), or 
(3). Notice to this affect will be made in a public announcement by the 
service. In such cases the effect of grants and contributions made after 
the date of the announcement will depend upon the statutory 
qualification of the organization as an organization described in 
section 509(a) (1), (2), or (3).
    (b) Exceptions. (1) Paragraph (a) of this section shall not apply if 
the grantor or contributor:
    (i) Had knowledge of the revocation of the ruling or determination 
letter classifying the organization as an organization described in 
section 509(a) (1), (2), or (3), or
    (ii) Was in part responsible for, or was aware of, the act, the 
failure to act, or the substantial and material change on the part of 
the organization which gave rise to the revocation of the ruling or 
determination letter classifying the organization as an organization 
described in section 509(a) (1), (2), or (3).
    (2) Paragraph (a) of this section shall not apply where a different 
rule is otherwise expressly provided in the regulations under sections 
170(b)(1)(A), 507(b)(1)(B), or 509.

[T.D. 7212, 37 FR 21923, Oct. 17, 1972]