§4967 Taxes on Prohibited Benefits

Summary

It taxes advice or agreements that cause a donor‑advised fund to pay out money that gives a more‑than‑incidental benefit to the adviser or certain related people. If advice causes such a benefit, the adviser or anyone who gets the benefit must pay a tax equal to 125% of the benefit. If a fund manager agrees to the payout knowing it will create that benefit, the manager must pay a tax equal to 10% of the benefit, but that 10% tax for one distribution cannot be more than $10,000. If more than one person is responsible for the same distribution, each can be held fully responsible for the tax. No tax under these rules applies if a tax was already charged for the same distribution under section 4958. The people covered here are those described in section 4958(f)(7) for donor‑advised funds.