§4967 Taxes on Prohibited Benefits

Summary

Taxes must be paid when someone advises a donor‑advised fund to make a distribution that gives a person a more‑than‑minor personal benefit. If that happens, the advisor or the person who gets the benefit owes a tax equal to 125 percent of the value of the benefit. If a fund manager agreed to the distribution knowing it would cause that benefit, the manager owes a tax equal to 10 percent of the benefit, but not more than $10,000 for that one distribution. If more than one person is responsible, any of them can be held for the full tax. No tax applies here if the same distribution was already taxed under another law. "Person described" means people connected to the donor‑advised fund, like the donor, donor advisor, or related persons.