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26 U.S.C. § 4967 — Taxes on prohibited benefits
Federal law — U.S. Code and appendices · legal_authorities
**(a) Imposition of taxes**
(1) **On the donor, donor advisor, or related person** — There is hereby imposed on the advice of any person described in subsection (d) to have a sponsoring organization make a distribution from a donor advised fund which results in such person or any other person described in subsection (d) receiving, directly or indirectly, a more than incidental benefit as a result of such distribution, a tax equal to 125 percent of such benefit. The tax imposed by this paragraph shall be paid by any person described in subsection (d) who advises as to the distribution or who receives such a benefit as a result of the distribution.
(2) **On the fund management** — There is hereby imposed on the agreement of any fund manager to the making of a distribution, knowing that such distribution would confer a benefit described in paragraph (1), a tax equal to 10 percent of the amount of such benefit. The tax imposed by this paragraph shall be paid by any fund manager who agreed to the making of the distribution.
**(b) Exception** No tax shall be imposed under this section with respect to any distribution if a tax has been imposed with respect to such distribution under section 4958.
**(c) Special rules** For purposes of subsection (a)—
(1) **Joint and several liability** — If more than one person is liable under paragraph (1) or (2) of subsection (a) with respect to a distribution described in subsection (a), all such persons shall be jointly and severally liable under such paragraph with respect to such distribution.
(2) **Limit for management** — With respect to any one distribution described in subsection (a), the maximum amount of the tax imposed by subsection (a)(2) shall not exceed $10,000.
**(d) Person described** A person is described in this subse
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Source location: Title 26, Chapter 42, § 4967; chapter-042-private-foundations-and-certain-other-tax-exempt-organizations.md
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**(a) Imposition of taxes**
(1) **On the donor, donor advisor, or related person** — There is hereby imposed on the advice of any person described in subsection (d) to have a sponsoring organization make a distribution from a donor advised fund which results in such person or any other person described in subsection (d) receiving, directly or indirectly, a more than incidental benefit as a result of such distribution, a tax equal to 125 percent of such benefit. The tax imposed by this paragraph shall be paid by any person described in subsection (d) who advises as to the distribution or who receives such a benefit as a result of the distribution.
(2) **On the fund management** — There is hereby imposed on the agreement of any fund manager to the making of a distribution, knowing that such distribution would confer a benefit described in paragraph (1), a tax equal to 10 percent of the amount of such benefit. The tax imposed by this paragraph shall be paid by any fund manager who agreed to the making of the distribution.
**(b) Exception** No tax shall be imposed under this section with respect to any distribution if a tax has been imposed with respect to such distribution under section 4958.
**(c) Special rules** For purposes of subsection (a)—
(1) **Joint and several liability** — If more than one person is liable under paragraph (1) or (2) of subsection (a) with respect to a distribution described in subsection (a), all such persons shall be jointly and severally liable under such paragraph with respect to such distribution.
(2) **Limit for management** — With respect to any one distribution described in subsection (a), the maximum amount of the tax imposed by subsection (a)(2) shall not exceed $10,000.
**(d) Person described** A person is described in this subsection if such person is described in section 4958(f)(7) with respect to a donor advised fund.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) First tier tax** For purposes of this subchapter, the term “first tier tax” means any tax imposed by subsection (a) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4966, 4967, 4971, or 4975.
**(b) Second tier tax** For purposes of this subchapter, the term “second tier tax” means any tax imposed by subsection (b) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4971, or 4975.
**(c) Taxable event** For purposes of this subchapter, the term “taxable event” means any act (or failure to act) giving rise to liability for tax under section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4966, 4967, 4971, or 4975.
**(d) Correct** For purposes of this subchapter—
(1) **In general** — Except as provided in paragraph (2), the term “correct” has the same meaning as when used in the section which imposes the second tier tax.
(2) **Special rules** — The term “correct” means—
(A) in the case of the second tier tax imposed by section 4942(b), reducing the amount of the undistributed income to zero,
(B) in the case of the second tier tax imposed by section 4943(b), reducing the amount of the excess business holdings to zero, and
(C) in the case of the second tier tax imposed by section 4944, removing the investment from jeopardy.
**(e) Correction period** For purposes of this subchapter—
(1) **In general** — The term “correction period” means, with respect to any taxable event, the period beginning on the date on which such event occurs and ending 90 days after the date of mailing under section 6212 of a notice of deficiency with respect to the second tier tax imposed on such taxable event, extended by—
(A) any period in which a deficiency cannot be assessed under section 6213(a) (determined without regard to the last sent
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Federal law — U.S. Code and appendices · legal_authorities
Page 3054
TITLE 26—INTERNAL REVENUE CODE
§ 4967
(ii) any organization which is described
in subparagraph (B) or (C) if—
(I) the donor or any person designated
by the donor for the purpose of advising
with respect to distributions from a
donor advised fund (and any related par-
ties) directly or indirectly controls a
supported organization (as defined in
section 509(f)(3)) of such organization, or
(II) the Secretary determines by regu-
lations that a distribution to such orga-
nization otherwise is inappropriate.
(B) Type I and type II supporting organiza-
tions
An organization is described in this sub-
paragraph if the organization meets the re-
quirements of subparagraphs (A) and (C) of
section 509(a)(3) and is—
(i) operated, supervised, or controlled by
one or more organizations described in
paragraph (1) or (2) of section 509(a), or
(ii) supervised or controlled in connec-
tion with one or more such organizations.
(C) Functionally integrated type III sup-
porting organizations
An organization is described in this sub-
paragraph if the organization is a function-
ally integrated type III supporting organiza-
tion (as defined under section 4943(f)(5)(B)).
(Added Pub. L. 109–280, title XII, § 1231(a), Aug.
17, 2006, 120 Stat. 1095.)
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE
Section applicable to taxable years beginning after
Aug. 17, 2006, see section 1231(c) of Pub. L. 109–280, set
out as an Effective Date of 2006 Amendment note under
section 4963 of this title.
§ 4967. Taxes on prohibited benefits
(a) Imposition of taxes
(1) On the donor, donor advisor, or related per-
son
There is hereby imposed on the advice of any
person described in subsection (d) to have a
sponsoring organization make a distribution
from a donor advised
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