A.3. Definition of Agreement

(1) The 5% tax, as stated above, is imposed on the agreement of a foundation

manager to make a taxable expenditure. Agreement is defined to mean approval, which is sufficient to constitute an exercise of the foundation manager's authority to approve, or to exercise discretion in recommending approval of, the making of the expenditure by the foundation, whether or not such manifestation of approval is the final or decisive approval on behalf of the foundation.

Example: A member of the board of directors who votes in favor of making a taxable expenditure would be considered to have approved of or agreed to the expenditure. See Treas. Reg. 53.4945-1(a)(2)(ii).