Congress enacted subchapter A of chapter 42 in an effort "to put an end, as far as it reasonably could, to the abuses and potential abuses associated with private foundations." Mannheimer Charitable Trust v. Commissioner, 93 T.C. 35, 39 (1989). In general, section 4944 (a)(1) imposes an excise tax on each investment which jeopardizes the exempt purposes of a private foundation.
Congress enacted subchapter A of chapter 42, in an effort “to put an end, as far as it reasonably could, to the abuses and potential abuses associated with private foundations.” Mannheimer Charitable Trust v. Commissioner, 93 T.C. 35, 39 (1989). In general, section 4944(a)(1) imposes an excise tax on each investment which jeopardizes the exempt purposes of a private foundation.
Discussing another provision of the Internal Revenue Code aimed at curbing abuse, Judge Raum observed that "Congress was obviously fed up with widespread abusive practices." Hans S. Mannheimer Charitable Trust v. Commissioner, 93 T.C. 35 (1989). We believe the section 6700 and 6701 penalties reflect a similar congressional intolerance of grossly abusive practices.