The monetary penalties can be very harsh. Someone in a decision-making position over a non-profit who receives a compensation or benefit that exceeds the value of his or her contributions is subject to an excise tax of twenty-five percent (25%) of the excess amount. If they do not return the excess to the nonprofit by a set date, an additional tax of two hundred percent (200%) is imposed. Organization managers responsible for approving an excess benefit transaction can be held liable for an excise tax of ten percent (10%) of the excess benefit, with a ceiling of $10,000 per transaction.
Because fines can be so hefty, it's a good idea to make sure you have adequate representation. Please contact Gross & Romanick today.
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