Exempt Organizations Technical Guide›TG 62: Excise Taxes on Taxable Expenditures – IRC Section 4945›Table of Contents
A. Sanctions Under Section 4945
Publication 5590 — Exempt Organizations Technical Guide TG 62: Excise Taxes on Taxable Expenditures under IRC 4945 · 2026-10-03 edition · updated 2026-10-04 · United States
(1) Section 4945 imposes a multi-level tax designed to deter private foundations from
making certain expenditures.
a. On making a taxable expenditure, a first tier tax is imposed on the private
foundation and perhaps the managers.
b. A severe second tier tax is imposed on the private foundation and the
managers for refusing to correct a taxable expenditure.
(2) In addition, repeated willful or flagrant violations of Section 4945 by a private
foundation may result in the termination of its private foundation status as well as the imposition of tax thereunder pursuant to Section 507. Also, the private foundation and foundation managers may be subject to a penalty under Section 6684.
Get a plain-English answer with a citation back to this text.
Ask AI about this code