Which of the following statements regarding intermediate sanctions is correct?
A) Intermediate sanctions are self-assessing (i.e., calculated and paid by the taxpayer rather than being imposed by the IRS).
B) The excise tax is imposed on the exempt organization and on disqualified persons.
C) Both a first-level tax and a second-level tax may apply.
D) The corporate tax rates apply in calculating the amount of the tax liability.

Question

Quizplus · Accepted Answer

Intermediate sanctions may result in both a first-level tax (imposed on the disqualified person who benefited from the transaction) and a second-level tax (imposed on the exempt organization that participated in the transaction). Options A, B, and D are incorrect statements regarding intermediate sanctions.

Which of the Following Statements Regarding Intermediate Sanctions Is Correct