IRS Issues Tips to Agents on Collecting “Automatic” Excess Benefits Taxes from Nonprofits
Benefits not reported as compensation when paid will be treated as excess even though total compensation is reasonable
As part of its new effort to enforce “automatic” excess benefits taxes for unreported compensation by nonprofits, the Internal Revenue issued some “Tips for Agents” in its 2004 Continuing Professional Education materials published in January.
Agents reviewing the finances of Section 501(c)(3) public charities and Section 501(c)(4) civic associations are supposed to review all agreements, loans and expense reimbursements with any “disqualified person,” any member of their family and any organization in which the disqualified person or any family members have an ownership interest.
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