Proposed Regulations on “Intermediate Sanctions” Applicable to Persons Associated with or Employed by Public Charities and Certain Other Tax-Exempt Organizations
This memorandum discusses proposed regulations issued by the Internal Revenue Service on July 30, 1998 that explain when penalty taxes can be imposed on certain insiders in the event of “excess benefit transactions” with a public charity or social welfare organization. The proposed regulations are of interest to anyone who serves as a director, officer, or highly compensated employee of a public charity or social welfare organization.