Deductibility of grants or contributions to operating foundation after change in status

The deductibility of grants or contributions to an operating foundation will not be affected until notice of a change in the status of such an organization is made to the public (such as by publication in the Internal Revenue Bulletin) unless:

1. The contribution was made after the con­tributor acquired knowledge that the Service would remove the foundation from classification as an operating founda­tion, or
2. The contribution was made after an act or failure to act which caused the inability to satisfy the tests for qualification as an op­erating foundation, and the contributor was responsible for, or was aware of, the act or failure to act. A contributor will not be con­sidered responsible for, or aware of, the act or failure to act if the contributor made the contribution relying on a written statement by the foundation that the contribu­tion would not result in the inability to qualify as an operating foundation. This statement must be signed by a foundation manager and must give enough facts con­cerning the operations and support of the organization to assure a reasonably pru­dent person that a contribution would not result in disqualification as an operating foundation.

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