26 U.S. Code § 4948 - Application of taxes and denial of exemption with respect to certain foreign organizations
In lieu of the tax imposed by section 4940, there is hereby imposed for each taxable year on the gross investment income (within the meaning of section 4940(c)(2)) derived from sources within the United States (within the meaning of section 861) by every foreign organization which is a private foundation for the taxable year a tax equal to 4 percent of such income.
Section 507 (relating to termination of private foundation status), section 508 (relating to special rules with respect to section 501(c)(3) organizations), and this chapter (other than this section) shall not apply to any foreign organization which has received substantially all of its support (other than gross investment income) from sources outside the United States.
A foreign organization described in subsection (b) shall not be exempt from taxation under section 501(a) if it has engaged in a prohibited transaction after December 31, 1969.
For purposes of this subsection, the term “prohibited transaction” means any act or failure to act (other than with respect to section 4942(e)) which would subject a foreign organization described in subsection (b), or a disqualified person (as defined in section 4946) with respect thereto, to liability for a penalty under section 6684 or a tax under section 507 if such foreign organization were a domestic organization.
2004—Subsec. (c)(4). Pub. L. 108–357 struck out “556(b)(2),” after “545(b)(2),” in introductory provisions.
1976—Subsec. (c). Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.
Amendment by Pub. L. 108–357 applicable to taxable years of foreign corporations beginning after Dec. 31, 2004, and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see section 413(d)(1) of Pub. L. 108–357, set out as an Effective and Termination Dates of 2004 Amendments note under section 1 of this title.
Written determinations for this section
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- Special Tax Rules for Certain Foreign Organizations : 2009-01-02
- Continuation of Private Foundation Status : 2008-11-14
- Special Tax Rules for Certain Foreign Organizations : 2008-11-14