§1212. Increase in penalty excise taxes relating to public charities, social welfare organizations, and private foundations

Pension Protection Act of 2006

Title XII Provisions Relating to Exempt Organizations

Subtitle B Reforming Exempt Organizations

Part 1 General Reforms

(a) TAXES ON SELF-DEALING AND EXCESS BENEFIT TRANSACTIONS.-

(a)(1) IN GENERAL.-Section 4941(a) (relating to initial taxes) is amended- (A) in paragraph (1), by striking "5 percent" and inserting "10 percent", and (B) in paragraph (2), by striking "21⁄2 percent" and inserting "5 percent".

(a)(2) INCREASED LIMITATION FOR MANAGERS ON SELFDEALING.- Section 4941(c)(2) is amended by striking "$10,000" each place it appears in the text and heading thereof and inserting "$20,000".

(a)(3) INCREASED LIMITATION FOR MANAGERS ON EXCESS BENEFIT TRANSACTIONS.-Section 4958(d)(2) is amended by striking "$10,000" and inserting "$20,000".

(b) TAXES ON FAILURE TO DISTRIBUTE INCOME.-Section 4942(a) (relating to initial tax) is amended by striking "15 percent" and inserting "30 percent".

(c) TAXES ON EXCESS BUSINESS HOLDINGS.-Section 4943(a)(1) (relating to imposition) is amended by striking "5 percent" and inserting "10 percent".

(d) TAXES ON INVESTMENTS WHICH JEOPARDIZE CHARITABLE PURPOSE.-

(d)(1) IN GENERAL.-Section 4944(a) (relating to initial taxes) is amended by striking "5 percent" both places it appears and inserting "10 percent".

(d)(2) INCREASED LIMITATION FOR MANAGERS.-Section 4944(d)(2) is amended-

(d)(2)(A) by striking "$5,000," and inserting "$10,000,", and

(d)(2)(B) by striking "$10,000." and inserting "$20,000.".

(e) TAXES ON TAXABLE EXPENDITURES.-

(e)(1) IN GENERAL.-Section 4945(a) (relating to initial taxes) is amended-

(e)(1)(A) in paragraph (1), by striking "10 percent" and inserting "20 percent", and

(e)(1)(B) in paragraph (2), by striking "21⁄2 percent" and inserting "5 percent".

(e)(2) INCREASED LIMITATION FOR MANAGERS.-Section 4945(c)(2) is amended-

(e)(2)(A) by striking "$5,000," and inserting "$10,000,", and

(e)(2)(B) by striking "$10,000." and inserting "$20,000.".

(f) EFFECTIVE DATE.-The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.