Unreasonable executive compensation paid to executives of 501c3 organizations is an area of concern for the IRS. Which of the following is a sanction available to the IRS?
A) If the executive receiving the excess benefits fails to repay the amount in a timely manner, an additional tax equal to 100 percent may be imposed.
B) Revoke the organization's 501c)3) status.
C) In the event compensation is found to be unreasonable, the organization will receive a penalty equal to 200% of the excess compensation.
D) In the event compensation is found to be unreasonable, the executive is required to pay back the excess benefit to the tax-exempt organization plus a penalty of 25% of the excess benefit on the individual receiving the compensation and a penalty of 10 percent on the individuals responsible for approving it.

Question

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If executive compensation is found to be unreasonable, the executive is required to pay back the excess benefit to the tax-exempt organization. In addition, there is a tax penalty of 25 percent of the excess benefit on the individual receiving the compensation and a penalty of 10 percent on the individuals responsible for approving the compensation. If the executive receiving the excess benefits fails to repay the amount in a timely manner, an additional tax equal to 200 percent may be imposed by the IRS.

Unreasonable Executive Compensation Paid to Executives of 501c3 Organizations Is