Ambrose Bierce defined a lawyer as [o]ne skilled in circumvention of the law,' and it seems likely that it was a similar view of certain exempt organizations which led Congress to enact the provisions of the Tax Reform Act of I969.2 The i965 Treasury Report on Private Foundations had set forth convincingly and at length both the failure of privately controlled foundations to police their own activities, and the law's incapacity to cope with the abuses found to exist.3 Private foundations are typically established as nonprofit corporations under state law and, along with other qualifying organizations, may obtain an exemption from federal income taxation under section 50I(c)(3) of the Internal Revenue Code of I954 because they are organized and operated for certain exempt purposes, principally those involving charitable, educational, scientific, or literary pursuits. With a few narrow exceptions organizations so exempt (whether private foundations or not), may accept contributions which are deductible to their donors under section I70. The conclusion of Congress evidenced in the Tax Reform Act was that many private foundations, while affording their financial supporters a tax deduction, were not using those contributions for the stated exempt purposes. Although prior law had provided for sanctions in certain extreme cases, it had not proved capable of dealing effectively with abuses on a lesser scale. The private foundation provisions of the Act attempt to remove that inadequacy by utilizing a series of graduated taxes to discourage private foundations from engaging in any of several kinds of activities viewed as improper. Congress cannot be said to have had community development corporations (CDC's) in mind when it enacted the private foundation provisions. Nevertheless, any CDC exempt under section 50I(c)(3), as every other exempt organization, must gauge what impact the private foundation provisions will have on its operations. In addition, a CDC not yet exempt but contemplating the submission of an application for exemption to the Internal Revenue Service will wish