A foundation manager is considered to have agreed to an expenditure knowing that it is a taxable expenditure only if he or she:
- Has actual knowledge of enough facts that, based only on these facts, the expenditure would be a taxable expenditure,
- Is aware that an expenditure under these circumstances may violate the federal tax law governing taxable expenditures, and
- Negligently fails to make reasonable attempts to determine whether the expenditure is a taxable expenditure, or is aware that it is in fact a taxable expenditure.
Having reason to know certain facts does not constitute knowing, except to the extent that it tends to prove actual knowledge.