F. Taxes on Excess Benefit Transactions

(1) After determining that a disqualified person received an excess benefit from an

ATEO, an examiner must calculate the tax on the excess benefit transaction.

(2) Section 4958 imposes initial and additional taxes on excess benefit transactions.

a. Initial taxes are imposed on the disqualified person and the management of

the organization.

b. Additional taxes are only asserted on the disqualified person.

Note: Because Section 4958(b) doesn’t impose additional taxes on the organization manager, a Thorne letter is not required to be issued for Section 4958 excise taxes. See also Thorne v. Commissioner, 99 T.C. 67 (1992).

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