Tax Planning and Compliance for Tax-Exempt Organizations, 6th Edition

Tax Planning and Compliance for Tax-Exempt Organizations, 6th Edition

by Jody Blazek
Released April 2020
Publisher(s): Wiley
ISBN: 9781119540953

Read it now on the O’Reilly learning platform with a 10-day free trial.

O’Reilly members get unlimited access to books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.

Start your free trial

Book description

A practical guide to handling the challenges facing tax-exempt organizations, written by a leading authority

Tax Planning and Compliance for Tax-Exempt Organizations, Sixth Edition ensures that you have the practical knowledge to handle critical tax situations. This book provides guidance for the significant issues facing nonprofit organizations. It’s an essential guide to navigating the complexities of nonprofit tax rules and regulations. Packed with checklists and suggestions starting with Exhibit 1.1, Organizations Reference Chart and Exhibit 1.2, Suitability for Tax-Exempt Status, this guide helps anyone that creates, advises, or manages a nonprofit organization.

Now, you can better understand the requirements for various categories of tax-exempt organizations:  public charities, private foundations, civic associations, business leagues, and social clubs, as well as title-holding companies and governmental entities. You’ll discover practical guidance on the issue of potentially owing income tax on revenue-producing enterprises. Clear explanations cover the many exceptions to taxability. Tax issues related to internet activity, advertising, publishing, services, and much more are all addressed in this tax planning guide designed specifically for nonprofit and tax-exempt nonprofit organizations.

  • Use extensive quick checklists that cover tax-exempt eligibility, reporting to the IRS, and tax compliance
  • Find detailed instructions for submitting a variety of exemption applications and tax forms
  • See sample documents, such as organizational bylaws, letters of application, and completed IRS forms
  • Refer to tools and practice aids, such as a comparison chart summarizing the differences between public and private charitable organizations

Written by one of the leading authorities in the field, the book also delves into recent tax law changes affecting nonprofits and other tax-exempt organizations. This indispensable guide can offer direction and support if you are challenged to successfully navigate the complex maze of nonprofit tax rules and regulations.

Table of contents

  1. Cover
  2. List of Exhibits
  3. Preface
    1. Part I: Qualifications of Tax-Exempt Organizations
    2. Part II: Standards for Private Foundations
    3. Part III: Obtaining and Maintaining Tax-Exempt Status
  4. About the Author
  5. Acknowledgments
  6. PART I: Qualifications of Tax-Exempt Organizations
    1. CHAPTER 1: Distinguishing Characteristics of Tax-Exempt Organizations
      1. 1.1 Differences between Exempt and Nonexempt Organizations
      2. 1.2 Nomenclature
      3. 1.3 Ownership and Control
      4. 1.4 Role of the Internal Revenue Service
      5. 1.5 Suitability as an Exempt Organization
      6. 1.6 Start-Up Tax and Financial Considerations
      7. 1.7 Choosing the Best Form of Organization
      8. Notes
    2. CHAPTER 2: Qualifying Under IRC §501(c)(3)
      1. 2.1 Organizational Test
      2. 2.2 Operational Test
      3. Notes
    3. CHAPTER 3: Religious Organizations
      1. 3.1 Types of Religious Organizations
      2. 3.2 Churches
      3. 3.3 Religious Orders
      4. 3.4 Religious and Apostolic Associations
      5. Notes
    4. CHAPTER 4: Charitable Organizations
      1. 4.1 Relief of the Poor
      2. 4.2 Promotion of Social Welfare
      3. 4.3 Lessening the Burdens of Government
      4. 4.4 Advancement of Religion
      5. 4.5 Advancement of Education and Science
      6. 4.6 Promotion of Health
      7. 4.7 Cooperative Hospital Service Organizations
      8. Notes
    5. CHAPTER 5: Educational, Scientific, and Literary Purposes and Prevention of Cruelty to Children and Animals
      1. 5.1 Educational Purposes
      2. 5.2 Literary Purposes
      3. 5.3 Scientific Purposes
      4. 5.4 Testing for Public Safety
      5. 5.5 Fostering National or International Amateur Sports Competition (But Only If No Part of Its Activities Involves the Provision of Athletic Facilities or Equipment)
      6. 5.6 Prevention of Cruelty to Children or Animals
      7. Notes
    6. CHAPTER 6: Civic Leagues and Local Associations of Employees: §501(c)(4)
      1. 6.1 Comparison of (c)(3) and (c)(4) Organizations
      2. 6.2 Qualifying and Nonqualifying Civic Organizations
      3. 6.3 Local Associations of Employees
      4. 6.4 Neighborhood and Homeowner's Associations
      5. 6.5 Disclosures of Nondeductibility
      6. Notes
    7. CHAPTER 7: Labor, Agricultural, and Horticultural Organizations: §501(c)(5)
      1. 7.1 Labor Unions
      2. 7.2 Agricultural Groups
      3. 7.3 Horticultural Groups
      4. 7.4 Disclosures of Nondeductibility
      5. Notes
    8. CHAPTER 8: Business Leagues: §501(c)(6)
      1. 8.1 Basic Characteristics
      2. 8.2 Meaning of “Common Business Interest”
      3. 8.3 Line of Business
      4. 8.4 Rendering Services for Members
      5. 8.5 Sources of Revenue
      6. 8.6 Membership Categories
      7. 8.7 Member Inurement
      8. 8.8 Chambers of Commerce and Boards of Trade
      9. 8.9 Comparison to §501(c)(5)
      10. 8.10 Recognition of Exempt Status
      11. 8.11 Formation of a Related Charitable Organization
      12. 8.12 Disclosures for Lobbying and Nondeductibility
      13. Notes
    9. CHAPTER 9: Social Clubs: §501(c)(7)
      1. 9.1 Organizational Requirements and Characteristics
      2. 9.2 Member Inurement Prohibited
      3. 9.3 Membership Requirements
      4. 9.4 Revenue Tests
      5. 9.5 Unrelated Business Income Tax
      6. 9.6 Filing and Disclosure Requirements
      7. Notes
    10. CHAPTER 10: Instrumentalities of Government and Title-Holding Corporations
      1. 10.1 §501(c)(1) Instrumentalities of the United States
      2. 10.2 Governmental Units
      3. 10.3 Qualifying for §501(c)(3) Status
      4. 10.4 §501(c)(2) Title-Holding Corporations
      5. 10.5 §501(c)(25) Title-Holding Corporations
      6. Notes
    11. CHAPTER 11: Public Charities
      1. 11.1 Distinctions between Public and Private Charities
      2. 11.2 “Inherently Public Activity” and Broad Public Support: §509(a)(1)
      3. 11.3 Community Foundations
      4. 11.4 Service-Providing Organizations: §509(a)(2)
      5. 11.5 Difference Between §509(a)(1) and §509(a)(2)
      6. 11.6 Supporting Organizations: §509(a)(3)
      7. 11.7 Testing for Public Safety: §509(a)(4)
      8. Notes
  7. PART II: Standards for Private Foundations
    1. CHAPTER 12: Private Foundations—General Concepts
      1. 12.1 Why Private Foundations Are Special
      2. 12.2 Special Rules Pertaining to Private Foundations
      3. 12.3 Application of Taxes to Certain Nonexempt Trusts
      4. 12.4 Termination of Private Foundation Status
      5. APPENDIX 12-1 Brief Description of Tax Sanctions Applicable to Private Foundations
      6. Excise Tax on Investment Income—§4940 Tax
      7. Notes
    2. CHAPTER 13: Excise Tax Based on Investment Income: IRC §4940
      1. 13.1 Formula for Taxable Income
      2. 13.2 Capital Gains
      3. 13.3 Ponzi Scheme Losses
      4. 13.4 Deductions from Gross Investment Income
      5. 13.5 Tax-Planning Ideas
      6. 13.6 Foreign Foundations
      7. 13.7 Timely Payment of Excise Tax
      8. 13.8. Tax on Private Colleges and Universities
      9. 13.9 Exempt Operating Foundations
      10. Notes
    3. CHAPTER 14: Self-Dealing: IRC §4941
      1. 14.1 Definition of Self-Dealing
      2. 14.2 Sale, Exchange, or Lease of Property
      3. 14.3 Loans
      4. 14.4 Compensation
      5. 14.5 Transactions that Benefit Disqualified Persons
      6. 14.6 Payments to Government Officials
      7. 14.7 Sharing Space, People, and Expenses
      8. 14.8 Indirect Deals
      9. 14.9 Property Held by Fiduciaries
      10. 14.10 Issues Once Self-Dealing Occurs
      11. Notes
    4. CHAPTER 15: Minimum Distribution Requirements: IRC §4942
      1. 15.1 Assets Used to Calculate Minimum Investment Return
      2. 15.2 Measuring Fair Market Value
      3. 15.3 Distributable Amount
      4. 15.4 Qualifying Distributions
      5. 15.5 Private Operating Foundations
      6. 15.6 Satisfying the Distribution Test
      7. Notes
    5. CHAPTER 16: Excess Business Holdings and Jeopardizing Investments: IRC §§4943 and 4944
      1. 16.1 Excess Business Holdings
      2. 16.2 Jeopardizing Investments
      3. 16.3 Program-Related Investments
      4. 16.4 Penalty Taxes
      5. Notes
    6. CHAPTER 17: Taxable Expenditures: IRC §4945
      1. 17.1 Lobbying
      2. 17.2 Voter Registration Drives
      3. 17.3 Grants to Individuals
      4. 17.4 Grants to Public Charities
      5. 17.5 Grants to Foreign Organizations
      6. 17.6 Expenditure Responsibility Grants
      7. 17.7 Noncharitable Expenditures
      8. 17.8 Excise Taxes Payable
      9. APPENDIX 17–1: Examples of Emergency, Hardship Grant Application, Church and Foreign Equivalency Grants
      10. Application For Emergency Assistance
      11. Application for Hardship Assistance Lower Income
      12. Church Substantiation Form
      13. Notes
  8. PART III: Obtaining and Maintaining Tax-Exempt Status
    1. CHAPTER 18: IRS Filings, Procedures, and Policies
      1. 18.1 IRS Determination Process
      2. 18.2 Annual Filing of Forms 990
      3. 18.3 Reporting Organizational Changes to the IRS
      4. 18.4 Weathering an IRS Examination
      5. 18.5 When an Organization Loses Its Tax-Exempt Status
      6. Notes
    2. CHAPTER 19: Maintaining Exempt Status
      1. 19.1 Checklists
    3. CHAPTER 20: Private Inurement and Intermediate Sanctions
      1. 20.1 Defining Inurement
      2. 20.2 Salaries and Other Compensation
      3. 20.3 Setting Salary
      4. 20.4 Housing and Meals
      5. 20.5 Purchase, Lease, or Sale of Property or Services
      6. 20.6 Loans and Guarantees
      7. 20.7 For‐Profit to Nonprofit and Vice Versa
      8. 20.8 Services Rendered for Individuals
      9. 20.9 Joint Ventures
      10. 20.10 Intermediate Sanctions
      11. Notes
    4. CHAPTER 21: Unrelated Business Income
      1. 21.1 IRS Scrutiny of Unrelated Business Income
      2. 21.2 History of the Unrelated Business Income Tax
      3. 21.3 Consequences of Receiving UBI
      4. 21.4 Definition of Trade or Business
      5. 21.5 What Is Unrelated Business Income?
      6. 21.6 “Regularly Carried On”
      7. 21.7 “Substantially Related”
      8. 21.8 Unrelated Activities
      9. 21.9 The Exceptions
      10. 21.10 Income Modifications
      11. 21.11 Calculating and Minimizing Taxable Income
      12. 21.12 Debt-Financed Property
      13. 21.13 Museums
      14. 21.14 Travel Tours
      15. 21.15 Publishing
      16. Notes
    5. CHAPTER 22: Relationships with Other Organizations and Businesses
      1. 22.1 Creation of (c)(3) by (c)(4), (5), or (6)
      2. 22.2 Alliances with Investors
      3. 22.3 Creation of a For-Profit Corporate Subsidiary
      4. 22.4 Active Business Relationships
      5. Notes
    6. CHAPTER 23: Electioneering and Lobbying
      1. 23.1 Election Campaign Involvement
      2. 23.2 Voter Education versus Candidate Promotion
      3. 23.3 Tax on Political Expenditures
      4. 23.4 Lobbying Activity of §501(c)(3) Organizations
      5. 23.5 Permissible Amounts of Lobbying
      6. 23.6 Lobbying Limits for §501(c)(4), (5), (6), and Other Exempt Organizations
      7. 23.7 Advocacy and Nonpartisan Analysis
      8. Notes
    7. CHAPTER 24: Deductibility and Disclosures
      1. 24.1 Overview of Deductibility
      2. 24.2 The Substantiation and Quid Pro Quo Rules
      3. 24.3 Valuing Donor Benefits
      4. 24.4 Unrelated Business Income Aspects of Fund-Raising
      5. 24.5 State and Local Regulations
      6. Notes
    8. CHAPTER 25: Employment Taxes
      1. 25.1 Distinctions Between Employees and Independent Contractors
      2. 25.2 Ministers
      3. 25.3 Reporting Requirements
      4. Notes
    9. CHAPTER 26: Mergers, Bankruptcies, and Terminations
      1. 26.1 Mergers and Other Combinations
      2. 26.2 Bankruptcy
      3. 26.3 Terminations
      4. Notes
  9. Table of Cases
  10. Table of IRS Revenue Rulings
  11. Table of IRS Procedures
  12. Index
  13. End User License Agreement

Product information

  • Title: Tax Planning and Compliance for Tax-Exempt Organizations, 6th Edition
  • Author(s): Jody Blazek
  • Release date: April 2020
  • Publisher(s): Wiley
  • ISBN: 9781119540953