[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: 26CFR53.4944-4]

[Page 158-159]
 
                       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 E_Taxes on Investments Which Jeopardize Charitable Purpose
 
Sec. 53.4944-4  Special rules.

    (a) Joint and several liability. In any case where more than one 
foundation manager is liable for the tax imposed under section 4944 
(a)(2) or (b)(2) with respect to any one jeopardizing investment, all 
such foundation managers shall be jointly and severally liable for the 
tax imposed under each such paragraph with respect to such investment.
    (b) Limits on liability for management. With respect to anyone 
jeopardizing investment, the maximum aggregate amount of tax collectible 
under section 4944(a)(2) from all foundation managers shall not exceed 
$5,000, and the maximum aggregate amount of tax collectible under 
section 4944(b)(2) from all foundation managers shall not exceed 
$10,000.
    (c) Examples. The provisions of this section may be illustrated by 
the following examples:


[[Page 159]]


    Example (1). A, B, and C are foundation managers of X, a private 
foundation. Assume that A, B, and C are liable for both initial and 
additional taxes under sections 4944(a)(2) and 4944(b)(2), respectively, 
for the following investments by X: an investment of $5,000 in the 
common stock of corporation M, and an investment of $10,000 in the 
common stock of corporation N. A, B, and C will be jointly and severally 
liable for the following initial taxes under section 4944(a)(2): a tax 
of $250 (i.e., 5 percent of $5,000) for each year (or part thereof) in 
the taxable period (as defined in section 4944(e)(1)) for the investment 
in M, and a tax of $500 (i.e., 5 percent of $10,000) for each year (or 
part thereof) in the taxable period for the investment in N. Further, A, 
B, and C will be jointly and severally liable for the following 
additional taxes under section 4944(b)(2): a tax of $250 (i.e., 5 
percent of $5,000) for the investment in M, and a tax of $500 (i.e., 5 
percent of $10,000) for the investment in N.
    Example (2). Assume the facts as stated in Example (1), except that 
X has invested $500,000 in the common stock of M, and $1 million in the 
common stock of N. A, B, and C will be jointly and severally liable for 
the following initial taxes under section 4944(a)(2): a tax of $5,000 
for the investment in M, and a tax of $5,000 for the investment in N. 
Further, A, B, and C will be jointly and severally liable for the 
following additional taxes under section 4944(b) (2): a tax of $10,000 
for the investment in M, and a tax of $10,000 for the investment in N.