[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: 26CFR53.4941(c)-1]

[Page 50]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 53_FOUNDATION AND SIMILAR EXCISE TAXES--Table of Contents
 
                     Subpart B_Taxes on Self-Dealing
 
Sec. 53.4941(c)-1  Special rules.

    (a) Joint and several liability. (1) In any case where more than one 
person is liable for the tax imposed by any paragraph of section 4941 
(a) or (b), all such persons shall be jointly and severally liable for 
the taxes imposed under such paragraph with respect to such act of self-
dealing.
    (2) The provisions of this paragraph may be illustrated by the 
following example:

    Example. A and B, who are managers of private foundation X, lend one 
of the foundation's paintings to G, a disqualified person, for display 
in G's office, in a transaction which gives rise to liability for tax 
under section 4941(a)(2) (relating to tax on foundation managers). An 
initial tax is imposed on both A and B with respect to the act of 
lending the foundation's painting to G. A and B are jointly and 
severally liable for the tax.

    (b) Limits on liability for management. (1) The maximum aggregate 
amount of tax collectible under section 4941(a)(2) from all foundation 
managers with respect to any one act of self-dealing shall be $10,000, 
and the maximum aggregate amount of tax collectible under section 
4941(b)(2) from all foundation managers with respect to any one act of 
self-dealing shall be $10,000.
    (2) The provisions of this paragraph may be illustrated by the 
following example:

    Example. A, a disqualified person with respect to private foundation 
Y, sells certain real estate having a fair market value of $500,000 to Y 
for $500,000 in cash. B, C, and D, all the managers of foundation Y, 
authorized the purchase on Y's behalf knowing that such purchase was an 
act of self-dealing. The actions of B, C, and D in approving the 
purchase were willful and not due to reasonable cause. Initial taxes are 
imposed upon the foundation managers under subsections (a)(2) and (c)(2) 
of section 4941. The tax to be paid by the foundation managers is 
$10,000 (the lesser of $10,000 or 2\1/2\ percent of the amount 
involved). The managers are jointly and severally liable for this 
$10,000, and this sum may be collected by the Internal Revenue Service 
from any one of them.