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Charities Must Avoid Excess Benefit Transactions-RRP

Charities Must Avoid Excess Benefit Transactions-RRP

Intermediate Sanctions statute imposes tax on "disqualified persons" who receive more from a transaction with a nonprofit than they give in return.

Excess Benefit Transactions can trigger serious consequences for all involved. Happily, the IRS provides very simple guidelines for investigating and approving business deals. These guidelines also constitute solid business practice, even in the negotiation of an arm's-length deal that cannot be an Excess Benefit Transaction.

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