---
title: "Build a related-party register against the excess-benefit and private-inurement rules"
url: "https://ailawframework.com/practice/not-for-profit-charities-and-associations/draft-a-conflicts-of-interest-register-from-the-related-party-papers/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A35-A20260923-2-US"
practice_area: "Not-for-Profit, Charities & Associations"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Build a related-party register against the excess-benefit and private-inurement rules

> 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.

Canonical page: https://ailawframework.com/practice/not-for-profit-charities-and-associations/draft-a-conflicts-of-interest-register-from-the-related-party-papers/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Not-for-Profit, Charities & Associations](https://ailawframework.com/practice/not-for-profit-charities-and-associations.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| 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 | United States |
| Applies to | [Draft a conflicts-of-interest register from the related-party papers](https://ailawframework.com/practice/not-for-profit-charities-and-associations/draft-a-conflicts-of-interest-register-from-the-related-party-papers.md) |

## Checking plan

- What the AI does: 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.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- Section 4958 has separate excess-benefit rules for donor-advised funds and supporting organisations. Those special rules were not applied.
- A revenue-based compensation arrangement is an excess benefit transaction only to the extent provided in regulations, and only if it results in inurement not permitted under § 501(c)(3) or (c)(4). Do not treat every bonus as excess.

## Sources

- [26 U.S.C. § 4958, taxes on excess benefit transactions](https://www.law.cornell.edu/uscode/text/26/4958) (checked 2026-10-22)
- [26 U.S.C. § 501(c)(3), private-inurement condition](https://www.law.cornell.edu/uscode/text/26/501) (checked 2026-10-22)
- [IRS, Exemption requirements for section 501(c)(3) organizations](https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations) (checked 2026-10-22)

## Forms and precedents for this task

| Form or precedent | Kind | AI level | Summary |
| --- | --- | --- | --- |
| [Section 501(c)(3) conflict of interest policy](https://ailawframework.com/precedents/not-for-profit-charities-and-associations/us-501c3-conflict-policy.md) | Policy | Yellow | A starting-point conflict of interest policy for an organisation described in section 501(c)(3). The IRS sample does not prescribe the terms. Adoption is not required for exemption. |
| [Nonprofit board minutes checklist](https://ailawframework.com/precedents/not-for-profit-charities-and-associations/us-board-minutes.md) | Checklist | Yellow | Checklist for minutes of a section 501(c)(3) governing body, including the conflict records described in the IRS sample. No opened source prescribes an ordinary minute form. |

Signed-in accounts can read the full text of each one.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*