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Transactions NOT subject to intermediate sanctions
Certain economic benefits provided to a disqualified person are disregarded for purposes of intermediate sanctions.
Benefits disregarded are:
benefits received solely as a volunteer for the organization, if the benefit is provided to the public for an annual membership fee or contribution of $75 or less
benefits received as a member or donor of the organization, if the benefit is provided to the member or donor solely on account of payment of a membership fee
benefits provided to a disqualified person solely as a member of a charitable class
benefits transferred to or for the use of a governmental unit if the transfer is for exclusively public purposes
nontaxable fringe benefits such as payment of reasonable and necessary expenses for a disqualified person to attend meetings. However, premium payments for liability insurance to cover intermediate sanctions excise taxes (and indemnification for such taxes) are included as part of the determination of reasonable compensation and are not disregarded.
Memory Jogger
Alex is a disqualified employee of a tax-exempt organization. His compensation was considered excessive, and he made restitution and paid the excise taxes. The organization reimbursed Alex for the taxes paid. This transaction is: