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Abstract: 

IRC §4941 imposes an excise tax on each act of self-dealing, direct or indirect, between a private foundation and disqualified persons. Even fair (or more than fair) transactions can be deemed “self-dealing” and trigger taxes and penalties. This article is the first in a series devoted to these rules, exploring their application, and procedure for correcting acts of self-dealing, with special focus on transactions that arise in the context of compensation and sharing of space and expenses. Exhibits include a sample compensation policy and sample office-sharing policy structured to avoid self-dealing determinations.

Keywords: Necessary services; reasonable compensation; Treas. Reg. §53.4941

Affiliations:  1: Bourland, Wall & Wenzel, P.C..