An intermediate sanction imposed by the IRS on an exempt organization is a lesser sanction than revocation of exempt status.

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An intermediate sanction is a penalty imposed by the IRS on an exempt organization for excess benefit transactions, which are transactions between the organization and disqualified persons that result in the person receiving more than fair market value for their involvement with the organization. Intermediate sanctions can include monetary fines and penalties, and are intended to correct the transaction and prevent future excess benefit transactions. Revocation of exempt status is a more severe penalty that would result in the organization losing its tax-exempt status.

An Intermediate Sanction Imposed by the IRS on an Exempt