[Code of Federal Regulations]
[Title 26, Volume 17]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR143.2]

[Page 445]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 143_TEMPORARY EXCISE TAX REGULATIONS UNDER THE TAX REFORM ACT OF 
1969--Table of Contents
 
Sec. 143.2  Taxes on self-dealing; scholarship and fellowship grants 
by private foundations.

    (a) In general. Section 4941(d)(1)(D) of the Internal Revenue Code 
of 1954 as added by section 101(b) of the Tax Reform Act of 1969 (83 
Stat. 500) provides that the term ``self-dealing'' includes any direct 
or indirect payment of compensation (or payment or reimbursement of 
expenses) by a private foundation to a disqualified person. Section 
4941(d)(1)(E) provides that the term ``self-dealing'' includes any 
direct or indirect transfer to, or use by, or for the benefit of, a 
disqualified person of the income or assets of a private foundation.
    (b) Scholarship and fellowship grants. A scholarship or fellowship 
grant to a person other than a Government official paid or incurred by a 
private foundation in accordance with a program which is consistent with 
the allowance of a deduction under section 170 for contributions made to 
such private foundation shall not constitute an act of self-dealing. For 
example, a scholarship or fellowship grant made by a private foundation 
in accordance with a program to award scholarship or fellowship grants 
to the children of employees of the donor shall not constitute an act of 
self-dealing if the private foundation has, after disclosure of the 
method of carrying out such program, received a ruling or determination 
letter stating that it is exempt from taxation under section 501(c)(3) 
and that contributions to the private foundation are deductible by the 
donor under section 170.

[T.D. 7030, 35 FR 4293, Mar. 10, 1970]