Ezel / IRS Rulings / 200940028

CCA 200940028: Family members may be disqualified persons in an excess-benefit analysis

Number
200940028
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Excess Benefit Transaction
Topics
Excise taxes
Code sections
§ 4946, § 4958
Ruling dated
September 3, 2008
Publicly released
October 2, 2009
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

This Chief Counsel Advice discusses who may be treated as a disqualified person or insider for purposes of an excess benefit transaction. It states that a person with a personal and private interest in an organization's activities may be an insider. It also explains that section 4958(f)(1) covers a person able to exercise substantial influence over an organization and includes family members under section 4946(d), including children. The advice refers to a Seventh Circuit case involving the United Cancer Council in discussing family members of founders and officers.

Ruling snapshot

  • Question: Who may qualify as a disqualified person in an excess-benefit analysis?
  • Outcome: Advice given.
  • Key authorities: IRC §§ 4946(d), 4958(f)(1); Treas. Reg. § 1.501(a)-1(c); United Cancer Council case.

Full text (IRS public release)

ID: CCA-903153-08 Number: 200940028
Release Date: 10/2/2009
Office: ------------------------------
UILC: 4958.00-00

From: ---------------------------
Sent: September 03, 2008 1:53 PM
To: -------------------------
Cc: ----------------------------
Subject: Final Adverse in ------

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A private shareholder or individual, aka, insider, is a person that has a personal and private interest in the activities of an organization. Reg. 1.501(a)-1(c). Not too helpful. Section 4958(f)(1) defines disqualified person as any person who at any time within a five year period is in a position to exercise substantial influence over the affairs of the organization. The term also includes such person's family members as determined under section 4946(d) and under that section includes children. The seventh circuit United Cancer Council case includes family members of founders and officers as insiders.

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