Tax Challenges for NPO Counsel: Excess Benefit Transactions for Executive Comp and Other Financial Dealings

Identifying Prohibited Transactions and Disqualified Persons, Reporting Improper Benefits, Maintaining the Exemption, and Avoiding Excise Taxes

Recording of a 110-minute premium CLE/CPE webinar with Q&A

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Conducted on Tuesday, January 7, 2014

Recorded event now available

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Course Materials

This CLE course will prepare non-profit tax counsel with strategies to avoid revocation of tax exempt status and liability for excise taxes based on excess benefit transactions.  The panel will review different types of excess benefit transactions, identify potential disqualified persons, tax penalties and revocation standards.  The program will also discuss recent case-law developments.


Given recent IRS tax-driven initiatives restricting excess benefit transactions, tax counsel must prepare non-profits organizations to scrutinize executive compensation and other financial transactions with officers, directors and other insiders (“disqualified persons”) to insure compliance with IRS rules.

Financial transactions subject to the rules include, among other things, salary, independent contractor payments, severance pay, revenue-sharing models, transfers of property, payment of insurance premiums and other excessive perks for insiders or their families.

Excess benefit transactions put an organization’s tax exempt status at risk and include hefty excise taxes for the recipient and potentially the NPO’s internal manager who approved the benefits. Improper transactions must be corrected and reported to the IRS; voluntary reporting can mitigate tax penalties.

Listen as our experienced panel discusses the IRS excess benefit transaction rules, automatic excess benefits, disqualified persons, the penalty taxes and revocation factors.  The panel will also outline the latest case law, analyze its application to donor-advised funds, and offer tax planning best practices to avoid running afoul of the excess benefit transaction rules.



  1. IRC excess benefit transactions
    1. Revocation factors
    2. Section 4598 excise taxes
    3. Automatic excess benefits
    4. Disqualified persons
  2. Current case law
    1. Planning strategies
  3. Donor-advised funds and supporting organizations
  4. Form 990


The panel will review these and other key questions:

  • What constitutes an excess benefit transaction and disqualified person for a nonprofit organization?
  • What steps can NPOs take to avoid excess benefit transactions?
  • What factors does the IRS consider in determining whether to revoke an organization's tax exempt status?
  • What are the reporting requirements?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.


David A. Levitt
David A. Levitt

Adler and Colvin

Mr. Levitt’s practice focuses on the representation of nonprofit and tax-exempt organizations, with an emphasis...  |  Read More

Douglas Mancino
Douglas Mancino

Hunton & Williams

For more than 35 years he has represented all types of healthcare and nonprofit organizations on tax, business, and...  |  Read More

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