[Federal Register Volume 73, Number 83 (Tuesday, April 29, 2008)]
[Rules and Regulations]
[Page 23069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-9362]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9390]
RIN 1545-BE37


Standards for Recognition of Tax-Exempt Status if Private Benefit 
Exists or if an Applicable Tax-Exempt Organization Has Engaged in 
Excess Benefit Transaction(s); Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains corrections to final regulations (TD 
9390) that were published in the Federal Register on Friday, March 28, 
2008 (73 FR 16519) clarifying the substantive requirements for tax 
exemption under section 501(c)(3) of the Internal Revenue Code. These 
final regulations also contain provisions that clarify the relationship 
between the substantive requirements for tax exemption under section 
501(c)(3) and the imposition of section 4958 excise taxes on excess 
benefit transactions.

DATES: This correction is effective April 29, 2008 and is applicable on 
March 28, 2008.

FOR FURTHER INFORMATION CONTACT: Galina Kolomietz, (202) 622-7971 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    The final regulations that are the subject of this document are 
under sections 501(c)(3) and 4958 of the Internal Revenue Code.

Need for Correction

    As published, final regulations (TD 9390) contain errors that may 
prove to be misleading and are in need of clarification.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

0
Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendments:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

Sec.  1.501(c)(3)-1  [Amended]

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Par. 2. Section 1.501(c)(3)-1 is amended as follows:
0
1. In paragraph (d)(1)(iii) Example 2. (ii), in the second sentence, 
the language ``As a result, the sole activity of O serves the private 
interests of these artists.'' is removed and the language ``As a 
result, the principal activity of O serves the private interests of 
these artists.'' is added in its place.
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2. In paragraph (f)(2)(iv) Example 2. (iii), in the sixth sentence, the 
language ``Beginning in Year 4, however, as O's exempt function 
activities grow, the size and scope of the excess benefit transactions 
that occurred in Year 3 become less and less significant as compared to 
the size and extent of O's regular and ongoing exempt function 
activities.'' is removed and the language ``Beginning in Year 4, 
however, as O's exempt function activities grow, the size and scope of 
the excess benefit transactions that occurred in Year 3 become less and 
less significant as compared to the size and scope of O's regular and 
ongoing exempt function activities.'' is added in its place.
0
3. In paragraph (f)(2)(iv) Example 4. (iii), in the fourth sentence, 
the language ``By adopting a conflicts of interest policy and 
significant new contract review procedures and by terminating C, O has 
implemented safeguards that are reasonably calculated to prevent future 
violations.'' is removed and the language ``By adopting a conflicts of 
interest policy and new contract review procedures and by terminating 
C, O has implemented safeguards that are reasonably calculated to 
prevent future violations.'' is added in its place.
* * * * *

LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
 [FR Doc. E8-9362 Filed 4-28-08; 8:45 am]
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