1.) Determine the "compensation" for the Board of Directors. As best as you can put a dollar figure on this amount. Please justify your answer in writing. We don't knkow if the Board of Directors actually received a salary, you may make this assumption if you wish.
2.) From the information given in the newspaper justify whether or not this meets the "reasonable" criteria of the IRS.
3.)The Board of Directors seems to justify their expenditures by saying that they have managed thecredit union well, dividends have been given to the members, and the membership and asset base had grown. What would the IRS claim that this is an example of
4.) One could argue that there is an example of an excess benefit transaction at this credit union.
a.) What is the transaction?
b.) Determine a dollar amount of the excess benefit. You will need to make educated guesses on this. Please make sure to justify your answer.
c.) What penalty might the credit union suffer because of the excess benefit? Would intermediatesanctions be a viable option?
d.) How could the credit union have avoided any appearance of excess benefit?