Tax Planning and Compliance for Tax-Exempt Organizations, Fifth Edition 2019 Cumulative Supplement, 5th Edition
by Jody Blazek
CHAPTER 20Private Inurement and Intermediate Sanctions
- § 20.1 Defining Inurement
- § 20.2 Salaries and Other Compensation
- § 20.4 Finding Salary Statistics
- § 20.8 Services Rendered for Individuals
- § 20.10 Intermediate Sanctions
p. 588. Add after second paragraph of introduction:
In recent years, the IRS has denied exemption to organizations with a limited number of board members, particularly if they are related. Also troublesome to them is too close a relationship between the planned activities and a business or activity owned by the organization's creators. The examples and concepts presented in this chapter should be considered in view of the ever expanding private letter rulings that deny exemption because of what they identify as private benefit or inurement, such as an organization intending to educate, empower, and engage individuals in daily life skills,1 and one performing scientific research to help a founder transform his ideas into marketable inventions, or conducting a program to train medical personnel.2
p. 588. Add after third paragraph:
Private benefit was found to accrue to parents of cheerleaders. The members of the organization volunteer their time to operate concession stands at school events to pay for tuition, books, and apparel for their children. The fact that the receipts were allocated ...