Build a related-party register against the excess-benefit and private-inurement rules
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- List each payment, loan or other benefit to a director, officer or other insider, the amount, the stated consideration, and the document and page. Write no conclusion that a benefit is excess.
- What the lawyer must review
- You decide whether any transaction is an excess benefit transaction or private inurement. Section 501(c)(3) requires that no part of the net earnings inure to the benefit of any private shareholder or individual. Section 4958(a)(1) imposes on each excess benefit transaction a tax equal to 25 percent of the excess benefit, paid by the disqualified person. Section 4958(a)(2) imposes on an organisation manager who participates knowing that it is such a transaction a tax equal to 10 percent of the excess benefit, unless the participation is not wilful and is due to reasonable cause. If the excess benefit is not corrected within the taxable period, § 4958(b) imposes an additional tax equal to 200 percent of the excess benefit. An excess benefit transaction is one in which an applicable tax-exempt organisation provides an economic benefit to or for the use of a disqualified person if the value of the benefit exceeds the value of the consideration, including services, received for it. The excess benefit is that excess. Who is a disqualified person is defined in § 4958(f). That definition was not applied line by line. The Internal Revenue Service states that an excess-benefit excise tax may be imposed on the person and on organisation managers who agree to the transaction. The register is a working list.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Consider narrowly defined preparation support after confirming the tool’s capability and permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Obtain and inspect the relevant current official register or search result. Confirm identities, interests and the date and scope of the search.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.
Forms and precedents for this task
| Form or precedent | Kind | AI use | Summary |
|---|---|---|---|
| Section 501(c)(3) conflict of interest policy | Policy | AI use Yellow | A starting-point conflict of interest policy for an organisation described in section 501(c)(3). |
| Nonprofit board minutes checklist | Checklist | AI use Yellow | Checklist for minutes of a section 501(c)(3) governing body, including the conflict records described in the IRS sample. |
Signed-in accounts can read the full text of each one. All precedents.