26 CFR § 143.2 - Taxes on self-dealing; scholarship and fellowship grants by private foundations.

---
identifier: "/us/cfr/t26/s143.2"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "26 CFR § 143.2 - Taxes on self-dealing; scholarship and fellowship grants by private foundations."
title_number: 26
title_name: "Internal Revenue"
section_number: "143.2"
section_name: "Taxes on self-dealing; scholarship and fellowship grants by private foundations."
chapter_name: "INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY"
subchapter_number: "D"
subchapter_name: "MISCELLANEOUS EXCISE TAXES"
part_number: "143"
part_name: "TEMPORARY EXCISE TAX REGULATIONS UNDER THE TAX REFORM ACT OF 1969"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "Sec. 7805, 68A Stat. 917; 26 U.S.C. 7805."
cfr_part: "143"
---


# 143.2 Taxes on self-dealing; scholarship and fellowship grants by private foundations.

(a) *In general.* Section 4941(d)(1)(D) of the Internal Revenue Code of 1954 as added by section 101(b) of the Tax Reform Act of 1969 (83 Stat. 500) provides that the term “self-dealing” includes any direct or indirect payment of compensation (or payment or reimbursement of expenses) by a private foundation to a disqualified person. Section 4941(d)(1)(E) provides that the term “self-dealing” includes any direct or indirect transfer to, or use by, or for the benefit of, a disqualified person of the income or assets of a private foundation.

(b) *Scholarship and fellowship grants.* A scholarship or fellowship grant to a person other than a Government official paid or incurred by a private foundation in accordance with a program which is consistent with the allowance of a deduction under section 170 for contributions made to such private foundation shall not constitute an act of self-dealing. For example, a scholarship or fellowship grant made by a private foundation in accordance with a program to award scholarship or fellowship grants to the children of employees of the donor shall not constitute an act of self-dealing if the private foundation has, after disclosure of the method of carrying out such program, received a ruling or determination letter stating that it is exempt from taxation under section 501(c)(3) and that contributions to the private foundation are deductible by the donor under section 170.

[T.D. 7030, 35 FR 4293, Mar. 10, 1970]