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Establishing the Rebuttable Presumption

John R. Wylie, Esq. | posted 11/02/2007
This article provided by the Engstrom Institute

Overview of "Intermediate Sanctions"

In 1996, Congress enacted the Taxpayers Bill of Rights 2, which, in part, gave the Internal Revenue Service (IRS) new authority to assess excise taxes against applicable tax-exempt organizations in certain circumstances. These new excise taxes, now codified in Section 4958 of the Internal Revenue Code of 1986, as amended (the "Code"), are commonly referred to as the "intermediate sanctions" rules. Prior to the enactment of these rules, the IRS could penalize a tax-exempt organization that violated the prohibitions against private inurement only by revoking the organization's tax-exempt status. Under Section 4958 and the regulations promulgated thereunder, the IRS now has the authority to impose these "intermediate sanctions" as a penalty in the event certain tax-exempt organizations violate the private inurement rules.

In general, the intermediate sanctions rules impose excise taxes on transactions that provide excess economic benefits to disqualified ...

See also:

 benefits, exemptions, legel, tax, tax code