The Jimenez Group, a private foundation, has been found guilty of self-dealing. To minimize its Federal excise taxes from this activity, Jimenez should:
A) Surrender its tax-exempt status.
B) Reorganize as a C corporation.
C) Pay the second-level excise tax immediately.
D) Undo ("correct") the violation immediately.

Question

Quizplus · Accepted Answer

Undoing or correcting the violation immediately is the most direct way for a private foundation to minimize Federal excise taxes resulting from self-dealing. This action addresses the issue at its root by reversing the prohibited transaction, thereby potentially reducing or eliminating the associated excise taxes.

The Jimenez Group, a Private Foundation, Has Been Found Guilty