Requirements for Invoking Rebuttable

(1) Approval by an authorized body. An authorized body means:

a. The ATEO’s governing body,

b. A committee of the governing body, or

c. Other parties authorized by the governing body to act on its behalf by

following procedures specified by the governing body to approve

compensation arrangements or property transfers to the extent permitted by state law. See Treas. Reg. 53.4958-6(c)(1)(i).

(2) An individual isn’t included on the authorized body when reviewing a specific

compensation arrangement or property transfer involving an individual if:

a. That individual meets with other members only to answer questions,

b. Otherwise recuses himself or herself from the meeting, and

c. Isn’t present during debate and voting on the compensation arrangement or

property transfer. See Treas. Reg. 53.4958-6(c)(1)(ii).

Note: The member isn’t considered as having a conflict of interest, under this rule, if an authorized body is reviewing a specific compensation arrangement or property transfer involving a member of the authorized body.

(3) Conflict of Interest - A member of the authorized body doesn’t have a conflict of

interest regarding a compensation arrangement or property transfer only if the member:

a. Isn’t the disqualified person participating in or economically benefiting from

the compensation arrangement or property transfer, and isn’t a member of the family of the disqualified person under Section 4958(f)(4) and Treas. Reg. 53.4958-3(b)(1),

b. Isn’t in an employment relationship subject to the direction or control of any

disqualified person participating in or economically benefiting from the compensation arrangement or property transfer,

c. Doesn’t receive compensation or other payments subject to approval by any

disqualified person participating in or economically benefiting from the compensation arrangement or property transfer,

d. Has no material financial interest affected by the compensation arrangement

or property transfer, and

e. Doesn’t approve a transaction providing economic benefits to any

disqualified person, participating in the compensation arrangement or property transfer, who in turn has approved or will approve a transaction providing economic benefits to the member. See Treas. Reg. 53.49586(c)(1)(iii)

(4) Comparability - An authorized body has appropriate data as to comparability if,

given the knowledge and expertise of its members, it has sufficient information to determine whether the compensation is reasonable, or the property transfer is at fair market value as defined in Treas. Reg. 53.4958-4(b). See Treas. Reg. 53.4958-6(c)(2)(i).

(5) As to comparability, appropriate data in the case of property includes, but is not

limited to:

a. Current independent appraisals of the value of all property to be transferred

b. Offers received as part of an open and competitive bidding process

(6) In the case of compensation, relevant information includes but is not limited to:

a. Compensation levels paid by similarly situated organizations, both taxable

and tax-exempt, for functionally comparable positions

b. The availability of similar services in the ATEO’s geographic area

c. Current compensation surveys compiled by independent firms

d. Actual written offers from similar institutions competing for the services of the

disqualified person

(7) Special rule for compensation paid by small organizations - For organizations

with annual gross receipts of less than $1 million, the authorized body is considered to have appropriate data as to comparability if it has data on compensation paid for similar services by three comparable organizations in the same or similar communities for similar services. No inference is intended with respect to whether circumstances falling outside this safe harbor will meet the requirement with respect to the collection of appropriate data. See Treas. Reg. 53.4958-6(c)(2)(ii).

a. An ATEO may calculate its annual gross receipts based on its gross receipts

average during the three prior taxable years. See Treas. Reg. 53.49586(c)(2)(iii).

b. The annual gross receipts of all organizations must be aggregated if any

ATEO is controlled by or controls another entity. See Treas. Reg. 53.49586(c)(2)(iii).

(8) Documentation - For a decision by an authorized body to be documented

adequately, the written or electronic records of the authorized body must note:

a. The terms of the transaction, and the date it was approved,

b. The members of the authorized body who were present during the debate of

the approved transaction, and who voted on it,

c. The comparability data obtained and relied upon by the authorized body, and

how the data was obtained, and

d. Any actions taken regarding the transaction by anyone who is a member of

the authorized body but who had a conflict of interest as to the transaction. See Treas. Reg. 53.4958-6(c)(3)(i).

(9) Variances - The authorized body must record the basis for its determination if the

authorized body determines that the reasonable compensation for a specific arrangement, or that the fair market value in a specific property transfer, varies from the range of comparable data obtained. See Treas. Reg.53.4958-6(c)(3)(ii).

(10) Concurrently - For a decision by an authorized body to be documented

concurrently, records must be prepared by the later of:

a. The next meeting of the authorized body, or

b. 60 days after final action by the authorized body. See Treas. Reg. 53.4958 6(c)(3)(ii).

(11) Records must be reviewed and approved by the authorized body as reasonable,

accurate, and complete within a reasonable time afterwards.