Prologue.

Chapter 1: Basics and History of Intermediate Sanctions Law.

§ 1.1 Intermediate Sanctions Law Basics.

(a) Meaning of Intermediate Sanctions.

(b) Nature of the Sanctions.

(c) Fundamental Terminology.

§ 1.2 History of Intermediate Sanctions.

(a) General History.

(b) Accompanying Regulations.

(c) Effective Dates.

§ 1.3 Applicable Tax-Exempt Organizations.

§ 1.4 Interrelationship with Other Law.

§ 1.5 Commentary on Intermediate Sanctions.

Chapter 2: Private Inurement and Private Benefit Doctrines.

§ 2.1 Essence of Private Inurement.

§ 2.2 Concept of Net Earnings.

§ 2.3 Requisite Insider.

§ 2.4 Types of Private Inurement.

(a) Compensation for Services.

(b) Rental Arrangements.

(c) Loans.

(d) Sales of Assets.

(e) Equity Distributions.

(f ) Assumptions of Liability.

(g) Employee Benefits.

(h) Tax Avoidance Schemes.

(i) Services Rendered.

(j ) Provision of Goods or Refreshments.

(k) Retained Interests.

(l) Embezzlements.

§ 2.5 Social Welfare Organizations.

§ 2.6 Per Se Private Inurement.

§ 2.7 Incidental Private Inurement.

§ 2.8 Private Benefit Doctrine.

(a) General Rules.

(b) Import of Joint Venture Cases.

(c) Perspective.

(d) Private Benefit: In the Background as Well as the Foreground.

Chapter 3: Disqualified Persons.

§ 3.1 Concept of Disqualified Person.

§ 3.2 Directors and Trustees.

§ 3.3 Officers.

§ 3.4 Key Employees.

§ 3.5 Facts and Circumstances Test.

(a) Facts and Circumstances Showing Influence.

(b) Facts and Circumstances Showing Little Influence.

§ 3.6 Family Members.

§ 3.7 Controlled Entities.

§ 3.8 Vendors of Products or Services.

§ 3.9 Nondisqualified Persons.

§ 3.10 Donor-Advised Funds.

§ 3.11 Other Rules.

Chapter 4: Excess Benefit Transactions.

§ 4.1 Concept of Excess Benefit Transaction.

(a) Excess Benefit Transaction Defined.

(b) Consideration.

(c) Indirect Excess Benefit Transactions.

(d) Element of Knowledge.

§ 4.2 Controlled Entities.

§ 4.3 Intermediaries.

§ 4.4 Initial Contract Exception.

(a) History of Exception.

(b) Fixed Payments.

(c) Initial Contracts.

(d) New Contracts.

§ 4.5 Valuation Standards.

(a) Valuation of Property.

(b) Valuation of Services.

§ 4.6 Compensation Arrangements.

(a) Meaning of Compensation.

(b) Ascertaining the Reasonableness of Compensation.

(c) Timing of Reasonableness of Compensation.

(d) Intent to Treat Benefit as Compensation.

§ 4.7 Other Transactions.

(a) Lending Transactions.

(b) Rental Transactions.

(c) Sales transactions.

§ 4.8 For the Use of Transactions.

§ 4.9 Revenue-Sharing Transactions.

(a) Definition of Revenue-Sharing Transaction.

(b) Overview of Legislative History.

(c) Profit-Sharing Plans.

(d) Percentage-Based Compensation.

(e) Proposed Regulations.

(f ) Revenue-Sharing in the Fundraising Context.

§ 4.10 Disregarded Economic Benefits.

Chapter 5: Rebuttable Presumption of Reasonableness.

§ 5.1 Concept of Rebuttable Presumption.

(a) Presumptions Generally.

(b) Intermediate Sanctions Rebuttable Presumption.

§ 5.2 Authorized Bodies.

§ 5.3 Conflicts of Interest.

§ 5.4 Appropriate Data.

(a) Knowledge and Expertise of Members.

(b) Relevant Information.

(c) Special Rules for Small Organizations.

§ 5.5 Documentation.

(a) General Rules.

(b) Rules as to Fixed and Nonfixed Payments.

(c) Absence of Inference.

§ 5.6 Rebutting the Presumption.

§ 5.7 Impact of Presumption.

Chapter 6: Applicability of Intermediate Sanctions.

§ 6.1 Excess Benefit.

§ 6.2 Initial Tax.

§ 6.3 Additional Tax.

(a) General Rules.

(b) Taxable Period.

§ 6.4 Correction.

(a) Concept of Correction.

(b) Forms of Correction.

(c) Correction Amount.

§ 6.5 Tax on Organization Managers.

(a) Definition of Organization Manager.

(b) Certain Committee Members.

(c) General Rules.

(d) Definition of Participation.

(e) Definition of Knowing.

(f ) Reliance on Professional Advice.

(g) Definition of Willful.

(h) Definition of Occurrence.

§ 6.6 Abatement.

(a) Initial Tax.

(b) Additional Tax.

§ 6.7 Period of Limitations.

§ 6.8 Revocation of Tax Exemption.

(a) General Rules.

(b) Private Inurement and Intermediate Sanctions.

(c) Commentary.

§ 6.9 Reporting Requirements.

§ 6.10 Deductibility of Taxes and Correction Amounts.

§ 6.11 Reimbursements and Insurance.

Epilogue.

Appendix A: Intermediate Sanctions Rules Executive Summary.

Appendix B: Intermediate Sanctions Law.

Appendix C: Intermediate Sanctions Legislative History.

Appendix D: History of Intermediate Sanctions.

Appendix E: Frequently Asked Questions About the Intermediate Sanctions Rules.

Appendix F: An Introduction to I.R.C. 4958 (Prepared by the IRS).

Appendix G: IRS Summary of Fringe Benefits.

Appendix H: Planning for Compliance.

Appendix I: Afterthoughts.

Table of Cases.

Table of IRS Revenue Rulings and Procedures.

Table of IRS Private Rulings.

Glossary.

Selected Bibliography.

Index.