Intermediate Sanctions

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Course Contents

Introduction
- page 1
- Overview
  - page 1
History of Intermediate Sanctions
- page 2
- Private Inurement
  - page 3
- Private Benefit
  - page 3
Excess Benefit Transactions
- page 4
- Q1: What Organizations are Involved?
  - page 4
- Q2: Who's Involved?
  - page 5
  - Disqualified persons
    - page 5
  - Non-disqualified persons
    - page 6
  - Facts and Circumstances Test
    - page 7
  - Donor-advised funds
    - page 8
  - Organization manager
    - page 8
    - Outside advisors
      - page 8
    - Committee membership
      - page 8
- Q3: What Transactions are Involved?
  - page 9
  - Element of knowledge
    - page 9
  - Indirect excess benefit transactions
    - page 9
  - Initial contracts exception
    - page 10
  - Transactions not subject to intermediate sanctions
    - page 11
Employee Compensation
- page 12
- Executive Compensation Review
  - page 13
  - Revenue-sharing arrangements
    - page 14
Criteria for Reasonableness
- page 15
- Test 1: Reasonable
  - page 15
- Test 2: For Services Rendered
  - page 15
- Rebuttable Presumption of Reasonableness
  - page 16
  - Approval by an authorized body
    - page 16
  - Appropriate data as to comparability
    - page 17
  - Documentation
    - page 17
  - Non-fixed payments
    - page 17
  - Absence of inference
    - page 17
Data Collection
- page 18
- ERI's Compensation Comparables Assessor Software
  - page 18
  - Interactive exercise
    - page 19
    - Your turn
      - page 20
- Additional Sources for Tax-Exempt Executive Pay Data
  - page 21
What are the Penalties?
- page 22
- Penalties for Disqualified Persons
  - page 22
  - Correction
    - page 22
    - Repayment
      - page 22
  - Excise tax
    - page 22
  - Additional tax
    - page 22
- Penalties for Organization Managers
  - page 23
- Tax Abatement
  - page 24
- Case Example
  - page 25
Summary
- page 26