Par. 2. Sections 53.4966-0 through 53.4966-6 are added to read as follows:
(a) In general. Section 4966 of the Internal Revenue Code imposes two excise taxes with respect to taxable distributions from a donor advised fund. Paragraph (b) of this section describes the excise tax under section 4966(a)(1) imposed on a sponsoring organization of a donor advised fund. Paragraph (c) of this section describes the excise tax under section 4966(a)(2) imposed on a fund manager who knowingly agrees to a taxable distribution.
(b) Taxes paid by the sponsoring organization. For each taxable distribution, the excise tax imposed by section 4966(a)(1) is equal to 20 percent of the amount of the taxable distribution from a donor advised fund. The tax imposed by section 4966(a)(1) (20-percent section 4966 tax) is paid by the sponsoring organization of the donor advised fund.
(c) Taxes paid by fund managers —(1) In general. For each taxable distribution with respect to which section 4966(a)(1) imposes an excise tax, the excise tax imposed by section 4966(a)(2) is equal to five percent of the amount of the taxable distribution on the agreement of any fund manager who agreed to the making of the taxable distribution with knowledge that it is a taxable distribution as described in paragraph (c)(3) of this section. The tax imposed by section 4966(a)(2) (five-percent section 4966 tax) is paid by the fund manager or managers who agreed to the making of the taxable distribution.
(2) Agreement. The agreement of any fund manager to the making of a taxable distribution consists of any manifestation of approval of the distribution that is sufficient to constitute an exercise of the fund manager's authority to approve, or to exercise discretion in recommending approval of, the making of the distribution by the sponsoring organization, whether or not the manifestation of approval is the final or decisive approval on behalf of the sponsoring organization.
(3) Knowledge. For purposes of section 4966(a)(2), a fund manager agrees to the making of a distribution with knowledge that it is a taxable distribution only if the manager either—
(i) Is in fact aware that it is a taxable distribution; or
(ii) Has knowledge of facts sufficient to determine that, based on those facts, the distribution would be a taxable distribution and negligently fails to make reasonable attempts to ascertain whether the distribution is a taxable distribution.
(4) Joint and several liability. In any case in which more than one fund manager is liable for the five-percent section 4966 tax, all such fund managers are jointly and severally liable for the five-percent section 4966 taxes imposed with respect to that distribution.
(5) Limit on liability for managers. The maximum aggregate amount of five-percent section 4966 tax collectible for any one taxable distribution is $10,000.