Applicable Tax-Exempt Organization
An applicable tax-exempt organization is a section 501(c)(3) or 501(c)(4) tax-exempt organization or an organization that was tax-exempt under section 501(c)(3) or 501(c)(4) any time in the five-year period ending on the day the excess benefit transaction occurred (the lookback period).
An applicable tax-exempt organization does not include:
- A private foundation
- A governmental entity that is not subject to taxation
- A foreign organization exempt under section 501(c)(3) or 501(c)(4) that receives substantially all of its support from sources outside the United States
- An organization whose exemption has been revoked, unless the revocation was based on inurement or private benefit. (However, the organization could still be an applicable tax-exempt organization because of the lookback period.)
Return to Life Cycle of a Public Charity