Private foundation taxable expenditures: Limitation on initial tax on foundation managers

The initial tax on the foundation managers is imposed only in cases when the following circumstances are present:

1. The initial tax on taxable expenditures is imposed on the private foundation making the expenditure,
2. The foundation manager agrees to the making of the expenditure knowing that it is a taxable expenditure, and
3. The foundation manager's agreement is willful, and
4. The foundation manager's agreement is not due to reasonable cause.

The tax on any particular expenditure applies only to agreements of:

1. Foundation managers with authority to approve, or to exercise discretion in recommending approval of, the expenditure, and
2. Foundation managers who are members of a group authorized to approve or recommend the making of the expenditure, such as the foundation's board of directors or trustees.

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