---
kind: "section"
citation: "26 U.S.C. § 4967"
title: "26"
title_heading: "Internal Revenue Code"
number: "4967"
heading: "Taxes on prohibited benefits"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/4967"
units:
  - "Subtitle D — Miscellaneous Excise Taxes"
  - "Chapter 42 — Private Foundations; and Certain Other Tax-Exempt Organizations"
  - "Subchapter G — Donor Advised Funds"
---

# §4967. Taxes on prohibited benefits

- (a) **Imposition of taxes—**
  - (1) **On the donor, donor advisor, or related person—** There is hereby imposed on the advice of any [person](/usc/26/4377.md?p=b-1-A) described in [subsection (d)](#d) to have a sponsoring organization make a distribution from a donor advised fund which results in such [person](/usc/26/4377.md?p=b-1-A) or any other [person](/usc/26/4377.md?p=b-1-A) described in [subsection (d)](#d) receiving, directly or [indirectly](/usc/26/101.md?p=a-3-B), a more than incidental benefit as a result of such distribution, a tax equal to 125 percent of such benefit. The tax imposed by this paragraph shall be paid by any [person](/usc/26/4377.md?p=b-1-A) described in [subsection (d)](#d) who advises as to the distribution or who receives such a benefit as a result of the distribution.
  - (2) **On the fund management—** There is hereby imposed on the agreement of any fund manager to the making of a distribution, knowing that such distribution would confer a benefit described in [paragraph (1)](#a-1), a tax equal to 10 percent of the amount of such benefit. The tax imposed by this paragraph shall be paid by any fund manager who agreed to the making of the distribution.
- (b) **Exception—** No tax shall be imposed under this section with respect to any distribution if a tax has been imposed with respect to such distribution under section 4958.
- (c) **Special rules—** For purposes of [subsection (a)](#a)—
  - (1) **Joint and several liability—** If more than one [person](/usc/26/4377.md?p=b-1-A) is liable under paragraph [(1)](#a-1) or [(2)](#a-2) of subsection (a) with respect to a distribution described in [subsection (a)](#a), all such [persons](/usc/26/4377.md?p=b-1-A) shall be jointly and severally liable under such paragraph with respect to such distribution.
  - (2) **Limit for management—** With respect to any one distribution described in [subsection (a)](#a), the maximum amount of the tax imposed by [subsection (a)(2)](#a-2) shall not exceed $10,000.
- (d) **Person described—** A [person](/usc/26/4377.md?p=b-1-A) is described in this subsection if such [person](/usc/26/4377.md?p=b-1-A) is described in [section 4958(f)(7)](/usc/26/4958.md?p=f-7) with respect to a donor advised fund.

## Source credit

(Added Pub. L. 109–280, title XII, § 1231(a), Aug. 17, 2006, 120 Stat. 1097.)

## Notes

### Statutory Notes and Related Subsidiaries

### Effective Date

Section applicable to taxable years beginning after Aug. 17, 2006, see section 1231(c) of Pub. L. 109–280, set out as an Effective Date of 2006 Amendment note under section 4963 of this title.