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:

  1. A private foundation
  2. A governmental entity that is not subject to taxation
  3. 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
  4. An organization whose exemption has been revoked, unless the revocation was based on inurement or private benefit.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.)

Additional information

Intermediate Sanctions - Excess Benefit Transactions


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