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26 U.S.C. § 4958 — Taxes on excess benefit transactions
Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial taxes**
(1) **On the disqualified person** — There is hereby imposed on each excess benefit transaction a tax equal to 25 percent of the excess benefit. The tax imposed by this paragraph shall be paid by any disqualified person referred to in subsection (f)(1) with respect to such transaction.
(2) **On the management** — In any case in which a tax is imposed by paragraph (1), there is hereby imposed on the participation of any organization manager in the excess benefit transaction, knowing that it is such a transaction, a tax equal to 10 percent of the excess benefit, unless such participation is not willful and is due to reasonable cause. The tax imposed by this paragraph shall be paid by any organization manager who participated in the excess benefit transaction.
**(b) Additional tax on the disqualified person** In any case in which an initial tax is imposed by subsection (a)(1) on an excess benefit transaction and the excess benefit involved in such transaction is not corrected within the taxable period, there is hereby imposed a tax equal to 200 percent of the excess benefit involved. The tax imposed by this subsection shall be paid by any disqualified person referred to in subsection (f)(1) with respect to such transaction.
**(c) Excess benefit transaction; excess benefit** For purposes of this section—
(1) **Excess benefit transaction**
(A) *In general* — The term “excess benefit transaction” means any transaction in which an economic benefit is provided by an applicable tax-exempt organization directly or indirectly to or for the use of any disqualified person if the value of the economic benefit provided exceeds the value of the consideration (including the performance of services) received for providing such benefit. For purposes of the pr
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Source file: Laws/federal/codes/united-states-code/title-26/section-4958-taxes-on-excess-benefit-transactions--48a210fe06.md
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Source location: Title 26, Chapter 42, § 4958; chapter-042-private-foundations-and-certain-other-tax-exempt-organizations.md
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**(a) Initial taxes**
(1) **On the disqualified person** — There is hereby imposed on each excess benefit transaction a tax equal to 25 percent of the excess benefit. The tax imposed by this paragraph shall be paid by any disqualified person referred to in subsection (f)(1) with respect to such transaction.
(2) **On the management** — In any case in which a tax is imposed by paragraph (1), there is hereby imposed on the participation of any organization manager in the excess benefit transaction, knowing that it is such a transaction, a tax equal to 10 percent of the excess benefit, unless such participation is not willful and is due to reasonable cause. The tax imposed by this paragraph shall be paid by any organization manager who participated in the excess benefit transaction.
**(b) Additional tax on the disqualified person** In any case in which an initial tax is imposed by subsection (a)(1) on an excess benefit transaction and the excess benefit involved in such transaction is not corrected within the taxable period, there is hereby imposed a tax equal to 200 percent of the excess benefit involved. The tax imposed by this subsection shall be paid by any disqualified person referred to in subsection (f)(1) with respect to such transaction.
**(c) Excess benefit transaction; excess benefit** For purposes of this section—
(1) **Excess benefit transaction**
(A) *In general* — The term “excess benefit transaction” means any transaction in which an economic benefit is provided by an applicable tax-exempt organization directly or indirectly to or for the use of any disqualified person if the value of the economic benefit provided exceeds the value of the consideration (including the performance of services) received for providing such benefit. For purposes of the preceding sentence, an economic benefit shall not be treated as consideration for the performance of services unless such organization clearly indicated its intent to so treat such benefit.
(B) *Excess benefit* — The term “excess benefit” means the excess referred to in subparagraph (A).
(2) **Special rules for donor advised funds** — In the case of any donor advised fund (as defined in section 4966(d)(2))—
(A) the term “excess benefit transaction” includes any grant, loan, compensation, or other similar payment from such fund to a person described in subsection (f)(7) with respect to such fund, and
(B) the term “excess benefit” includes, with respect to any transaction described in subparagraph (A), the amount of any such grant, loan, compensation, or other similar payment.
(3) **Special rules for supporting organizations**
(A) *In general* — In the case of any organization described in section 509(a)(3)—
(i) the term “excess benefit transaction” includes—
(I) any grant, loan, compensation, or other similar payment provided by such organization to a person described in subparagraph (B), and
(II) any loan provided by such organization to a disqualified person (other than an organization described in subparagraph (C)(ii)), and
(ii) the term “excess benefit” includes, with respect to any transaction described in clause (i), the amount of any such grant, loan, compensation, or other similar payment.
(B) *Person described* — A person is described in this subparagraph if such person is—
(i) a substantial contributor to such organization,
(ii) a member of the family (determined under section 4958(f)(4)) of an individual described in clause (i), or
(iii) a 35-percent controlled entity (as defined in section 4958(f)(3) by substituting “persons described in clause (i) or (ii) of section 4958(c)(3)(B)” for “persons described in subparagraph (A) or (B) of paragraph (1)” in subparagraph (A)(i) thereof).
(C) *Substantial contributor* — For purposes of this paragraph—
(i) *In general* — The term “substantial contributor” means any person who contributed or bequeathed an aggregate amount of more than $5,000 to the organization, if such amount is more than 2 percent of the total contributions and bequests received by the organization before the close of the taxable year of the organization in which the contribution or bequest is received by the organization from such person. In the case of a trust, such term also means the creator of the trust. Rules similar to the rules of subparagraphs (B) and (C) of section 507(d)(2) shall apply for purposes of this subparagraph.
(ii) *Exception* — Such term shall not include—
(I) any organization described in paragraph (1), (2), or (4) of section 509(a), and
(II) any organization which is treated as described in such paragraph (2) by reason of the last sentence of section 509(a) and which is a supported organization (as defined in section 509(f)(3)) of the organization to which subparagraph (A) applies.
(4) **Authority to include certain other private inurement** — To the extent provided in regulations prescribed by the Secretary, the term “excess benefit transaction” includes any transaction in which the amount of any economic benefit provided to or for the use of a disqualified person is determined in whole or in part by the revenues of 1 or more activities of the organization but only if such transaction results in inurement not permitted under paragraph (3) or (4) of section 501(c), as the case may be. In the case of any such transaction, the excess benefit shall be the amount of the inurement not so permitted.
**(d) Special rules** For purposes of this section—
(1) **Joint and several liability** — If more than 1 person is liable for any tax imposed by subsection (a) or subsection (b), all such persons shall be jointly and severally liable for such tax.
(2) **Limit for management** — With respect to any 1 excess benefit transaction, the maximum amount of the tax imposed by subsection (a)(2) shall not exceed $20,000.
**(e) Applicable tax-exempt organization** For purposes of this subchapter, the term “applicable tax-exempt organization” means—
(1) any organization which (without regard to any excess benefit) would be described in paragraph (3), (4), or (29) of section 501(c) and exempt from tax under section 501(a), and
(2) any organization which was described in paragraph (1) at any time during the 5-year period ending on the date of the transaction.
Such term shall not include a private foundation (as defined in section 509(a)).
**(f) Other definitions** For purposes of this section—
(1) **Disqualified person** — The term “disqualified person” means, with respect to any transaction—
(A) any person who was, at any time during the 5-year period ending on the date of such transaction, in a position to exercise substantial influence over the affairs of the organization,
(B) a member of the family of an individual described in subparagraph (A),
(C) a 35-percent controlled entity,
(D) any person who is described in subparagraph (A), (B), or (C) with respect to an organization described in section 509(a)(3) and organized and operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of the applicable tax-exempt organization,
(E) which involves a donor advised fund (as defined in section 4966(d)(2)), any person who is described in paragraph (7) with respect to such donor advised fund (as so defined), and
(F) which involves a sponsoring organization (as defined in section 4966(d)(1)), any person who is described in paragraph (8) with respect to such sponsoring organization (as so defined).
(2) **Organization manager** — The term “organization manager” means, with respect to any applicable tax-exempt organization, any officer, director, or trustee of such organization (or any individual having powers or responsibilities similar to those of officers, directors, or trustees of the organization).
(3) **35-percent controlled entity**
(A) *In general* — The term “35-percent controlled entity” means—
(i) a corporation in which persons described in subparagraph (A) or (B) of paragraph (1) own more than 35 percent of the total combined voting power,
(ii) a partnership in which such persons own more than 35 percent of the profits interest, and
(iii) a trust or estate in which such persons own more than 35 percent of the beneficial interest.
(B) *Constructive ownership rules* — Rules similar to the rules of paragraphs (3) and (4) of section 4946(a) shall apply for purposes of this paragraph.
(4) **Family members** — The members of an individual’s family shall be determined under section 4946(d); except that such members also shall include the brothers and sisters (whether by the whole or half blood) of the individual and their spouses.
(5) **Taxable period** — The term “taxable period” means, with respect to any excess benefit transaction, the period beginning with the date on which the transaction occurs and ending on the earliest of—
(A) the date of mailing a notice of deficiency under section 6212 with respect to the tax imposed by subsection (a)(1), or
(B) the date on which the tax imposed by subsection (a)(1) is assessed.
(6) **Correction** — The terms “correction” and “correct” mean, with respect to any excess benefit transaction, undoing the excess benefit to the extent possible, and taking any additional measures necessary to place the organization in a financial position not worse than that in which it would be if the disqualified person were dealing under the highest fiduciary standards, except that in the case of any correction of an excess benefit transaction described in subsection (c)(2), no amount repaid in a manner prescribed by the Secretary may be held in any donor advised fund.
(7) **Donors and donor advisors** — For purposes of paragraph (1)(E), a person is described in this paragraph if such person—
(A) is described in section 4966(d)(2)(A)(iii),
(B) is a member of the family of an individual described in subparagraph (A), or
(C) is a 35-percent controlled entity (as defined in paragraph (3) by substituting “persons described in subparagraph (A) or (B) of paragraph (7)” for “persons described in subparagraph (A) or (B) of paragraph (1)” in subparagraph (A)(i) thereof).
(8) **Investment advisors** — For purposes of paragraph (1)(F)—
(A) *In general* — A person is described in this paragraph if such person—
(i) is an investment advisor,
(ii) is a member of the family of an individual described in clause (i), or
(iii) is a 35-percent controlled entity (as defined in paragraph (3) by substituting “persons described in clause (i) or (ii) of paragraph (8)(A)” for “persons described in subparagraph (A) or (B) of paragraph (1)” in subparagraph (A)(i) thereof).
(B) *Investment advisor defined* — For purposes of subparagraph (A), the term “investment advisor” means, with respect to any sponsoring organization (as defined in section 4966(d)(1)), any person (other than an employee of such organization) compensated by such organization for managing the investment of, or providing investment advice with respect to, assets maintained in donor advised funds (as defined in section 4966(d)(2)) owned by such organization.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Allowance of deduction**
(1) **General rule** — There shall be allowed as a deduction any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary.
(2) **Corporations on accrual basis** — In the case of a corporation reporting its taxable income on the accrual basis, if—
(A) the board of directors authorizes a charitable contribution during any taxable year, and
(B) payment of such contribution is made after the close of such taxable year and on or before the 15th day of the fourth month following the close of such taxable year,
then the taxpayer may elect to treat such contribution as paid during such taxable year. The election may be made only at the time of the filing of the return for such taxable year, and shall be signified in such manner as the Secretary shall by regulations prescribe.
(3) **Future interests in tangible personal property** — For purposes of this section, payment of a charitable contribution which consists of a future interest in tangible personal property shall be treated as made only when all intervening interests in, and rights to the actual possession or enjoyment of, the property have expired or are held by persons other than the taxpayer or those standing in a relationship to the taxpayer described in section 267(b) or 707(b). For purposes of the preceding sentence, a fixture which is intended to be severed from the real property shall be treated as tangible personal property.
**(b) Percentage limitations**
(1) **Individuals** — In the case of an individual, the deduction provided in subsection (a) shall be limited as provided in the succeeding subparagra
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 170
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial taxes**
(1) **On the organization** — There is hereby imposed on each political expenditure by a section 501(c)(3) organization a tax equal to 10 percent of the amount thereof. The tax imposed by this paragraph shall be paid by the organization.
(2) **On the management** — There is hereby imposed on the agreement of any organization manager to the making of any expenditure, knowing that it is a political expenditure, a tax equal to 2½ percent of the amount thereof, unless such agreement is not willful and is due to reasonable cause. The tax imposed by this paragraph shall be paid by any organization manager who agreed to the making of the expenditure.
**(b) Additional taxes**
(1) **On the organization** — In any case in which an initial tax is imposed by subsection (a)(1) on a political expenditure and such expenditure is not corrected within the taxable period, there is hereby imposed a tax equal to 100 percent of the amount of the expenditure. The tax imposed by this paragraph shall be paid by the organization.
(2) **On the management** — In any case in which an additional tax is imposed by paragraph (1), if an organization manager refused to agree to part or all of the correction, there is hereby imposed a tax equal to 50 percent of the amount of the political expenditure. The tax imposed by this paragraph shall be paid by any organization manager who refused to agree to part or all of the correction.
**(c) Special rules** For purposes of subsections (a) and (b)—
(1) **Joint and several liability** — If more than 1 person is liable under subsection (a)(2) or (b)(2) with respect to the making of a political expenditure, all such persons shall be jointly and severally liable under such subsection with respect to such expenditure.
(2) **Limit for m
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4955
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Initial taxes**
(1) **On self-dealer** — There is hereby imposed a tax on each act of self-dealing between a disqualified person and a private foundation. The rate of tax shall be equal to 10 percent of the amount involved with respect to the act of self-dealing for each year (or part thereof) in the taxable period. The tax imposed by this paragraph shall be paid by any disqualified person (other than a foundation manager acting only as such) who participates in the act of self-dealing. In the case of a government official (as defined in section 4946(c)), a tax shall be imposed by this paragraph only if such disqualified person participates in the act of self-dealing knowing that it is such an act.
(2) **On foundation manager** — In any case in which a tax is imposed by paragraph (1), there is hereby imposed on the participation of any foundation manager in an act of self-dealing between a disqualified person and a private foundation, knowing that it is such an act, a tax equal to 5 percent of the amount involved with respect to the act of self-dealing for each year (or part thereof) in the taxable period, unless such participation is not willful and is due to reasonable cause. The tax imposed by this paragraph shall be paid by any foundation manager who participated in the act of self-dealing.
**(b) Additional taxes**
(1) **On self-dealer** — In any case in which an initial tax is imposed by subsection (a)(1) on an act of self-dealing by a disqualified person with a private foundation and the act is not corrected within the taxable period, there is hereby imposed a tax equal to 200 percent of the amount involved. The tax imposed by this paragraph shall be paid by any disqualified person (other than a foundation manager acting only as such) who participated in
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Congressional declaration of policy** The Congress hereby finds and declares that—
(1) it is in the public interest to encourage the growth and development of public radio and television broadcasting, including the use of such media for instructional, educational, and cultural purposes;
(2) it is in the public interest to encourage the growth and development of nonbroadcast telecommunications technologies for the delivery of public telecommunications services;
(3) expansion and development of public telecommunications and of diversity of its programming depend on freedom, imagination, and initiative on both local and national levels;
(4) the encouragement and support of public telecommunications, while matters of importance for private and local development, are also of appropriate and important concern to the Federal Government;
(5) it furthers the general welfare to encourage public telecommunications services which will be responsive to the interests of people both in particular localities and throughout the United States, which will constitute an expression of diversity and excellence, and which will constitute a source of alternative telecommunications services for all the citizens of the Nation;
(6) it is in the public interest to encourage the development of programming that involves creative risks and that addresses the needs of unserved and underserved audiences, particularly children and minorities;
(7) it is necessary and appropriate for the Federal Government to complement, assist, and support a national policy that will most effectively make public telecommunications services available to all citizens of the United States;
(8) public television and radio stations and public telecommunications services constitute valuable local community resour
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Federal law — U.S. Code and appendices · legal_authorities
Page 3044
TITLE 26—INTERNAL REVENUE CODE
§ 4958
Editorial Notes
AMENDMENTS
1996—Subsec. (e). Pub. L. 104–168 substituted ‘‘sec-
tions 4945 and 4958’’ for ‘‘section 4945’’ in heading and
inserted ‘‘or an excess benefit for purposes of section
4958’’ before period at end of text.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1996 AMENDMENT
Pub. L. 104–168, title XIII, § 1311(d)(1), (2), July 30, 1996,
110 Stat. 1478, provided that:
‘‘(1) IN GENERAL.—The amendments made by this sec-
tion [enacting section 4958 of this title and amending
this section and sections 4963, 6213, 7422, and 7454 of this
title] (other than subsection (b)) [amending section 501
of this title] shall apply to excess benefit transactions
occurring on or after September 14, 1995.
‘‘(2) BINDING CONTRACTS.—The amendments referred
to in paragraph (1) shall not apply to any benefit aris-
ing from a transaction pursuant to any written con-
tract which was binding on September 13, 1995, and at
all times thereafter before such transaction occurred.’’
EFFECTIVE DATE
Pub. L. 100–203, title X, § 10712(d), Dec. 22, 1987, 101
Stat. 1330–468, provided that: ‘‘The amendments made
by this section [enacting this section and amending
sections 4962, 4963, 6213, 6501, 6503, 6684, 7422, and 7454 of
this title] shall apply to taxable years beginning after
the date of the enactment of this Act [Dec. 22, 1987].’’
Subchapter D—Failure by Certain Charitable
Organizations To Meet Certain Qualification
Requirements
Sec.
4958.
Taxes on excess benefit transactions.
4959.
Taxes on failures by hospital organizations.
4960.
Tax on excess tax-exempt organization execu-
tive compensation.
Editorial Notes
PRIOR PROVISIONS
A prior subchapter D, consisting of sections 4961 to
4963 of this titl
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 4958
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