26 U.S.C. § 4966: Taxes on taxable distributions

There is hereby imposed on each taxable distribution a tax equal to 20 percent of the amount thereof. The tax imposed by this paragraph shall be paid by the sponsoring organization with respect to the donor advised fund. There is hereby imposed on the agreement of any fund manager to the making of a distribution, knowing that it is a taxable distribution, a tax equal to 5 percent of the amount thereof. The tax imposed by this paragraph shall be paid by any fund manager who agreed to the making of the distribution. If more than one person is liable under subsection (a)(2) with respect to the making of a taxable distribution, all such persons shall be jointly and severally liable under such paragraph with respect to such distribution. With respect to any one taxable distribution, the maximum amount of the tax imposed by subsection (a)(2) shall not exceed $10,000. to any natural person, or such distribution is for any purpose other than one specified in section 170(c)(2)(B), or the sponsoring organization does not exercise expenditure responsibility with respect to such distribution in accordance with section 4945(h). to any organization described in section 170(b)(1)(A) (other than a disqualified supporting organization), to the sponsoring organization of such donor advised fund, or to any other donor advised fund. is described in section 170(c) (other than in paragraph (1) thereof, and without regard to paragraph (2)(A) thereof), is not a private foundation (as defined in section 509(a)), and maintains 1 or more donor advised funds. which is separately identified by reference to contributions of a donor or donors, which is owned and controlled by a sponsoring organization, and with respect to which a donor (or any person appointed or designated by such donor) has, or reasonably expects to have, advisory privileges with respect to the distribution or investment of amounts held in such fund or account by reason of the donor’s status as a donor. which makes distributions only to a single identified organization or governmental entity, or such person’s advisory privileges are performed exclusively by such person in the person’s capacity as a member of a committee all of the members of which are appointed by the sponsoring organization, no combination of persons described in subparagraph (A)(iii) (or persons related to such persons) control, directly or indirectly, such committee, and all grants from such fund or account are awarded on an objective and nondiscriminatory basis pursuant to a procedure approved in advance by the board of directors of the sponsoring organization, and such procedure is designed to ensure that all such grants meet the requirements of paragraph (1), (2), or (3) of section 4945(g). if such fund or account is advised by a committee not directly or indirectly controlled by the donor or any person appointed or designated by the donor for the purpose of advising with respect to distributions from such fund (and any related parties), or if such fund benefits a single identified charitable purpose. an officer, director, or trustee of such sponsoring organization (or an individual having powers or responsibilities similar to those of officers, directors, or trustees of the sponsoring organization), and with respect to any act (or failure to act), the employees of the sponsoring organization having authority or responsibility with respect to such act (or failure to act). any type III supporting organization (as defined in section 4943(f)(5)(A)) which is not a functionally integrated type III supporting organization (as defined in section 4943(f)(5)(B)), and the donor or any person designated by the donor for the purpose of advising with respect to distributions from a donor advised fund (and any related parties) directly or indirectly controls a supported organization (as defined in section 509(f)(3)) of such organization, or the Secretary determines by regulations that a distribution to such organization otherwise is inappropriate. operated, supervised, or controlled by one or more organizations described in paragraph (1) or (2) of section 509(a), or supervised or controlled in connection with one or more such organizations. An organization is described in this subparagraph if the organization is a functionally integrated type III supporting organization (as defined under section 4943(f)(5)(B)).