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Intermediate Sanctions

Explain why Congress enacted the "intermediate sanctions" legislation in 1996.

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1. Explain why Congress enacted the "intermediate sanctions" legislation in 1996.

The purpose of the law of intermediate sanctions is to prevent wrongdoing by persons who have a special relationship with many types of non-profit, tax-exempt organizations, particularly charitable entities. Before enactment of the intermediate sanctions rules (1996), the Internal Revenue Service, when faced with one of these inappropriate transactions, had essentially two choices:

1. Apply the private inurement doctrine or the private benefit doctrine and revoke the tax-exempt status of the organization.
2. Ignore the matter (or perhaps informally ...

Solution Summary

Explains why Congress enacted the "intermediate sanctions" legislation in 1996. Supplemented with an article that provides a full coverage of the 'Intermediate Sanctions Law' of 1996.

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