Tax Planning and Compliance for Tax-Exempt Organizations. Rules, Checklists, Procedures - 2018 Cumulative Supplement. 5th Edition

  • ID: 4433873
  • Book
  • 256 Pages
  • John Wiley and Sons Ltd
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The essential time–saving guide to the latest in nonprofit tax rules, regulations, and procedures

Tax rules and regulations change annually, and nonprofit organizations know that staying compliant means staying up to date. But wading through tax code is less than helpful in the field, whereas the clear, practically oriented instruction inside provides the quick reference accountants, lawyers, and executives need. In the latest edition of Tax Planning and Compliance for Tax–Exempt Organizations, you′ll find straightforward information on changing Unrelated Business Income (UBI) rules, joint ventures, sponsorships, deductions against UBI, preparation of IRS forms, and more.

Nonprofit organizations including health and welfare organizations, colleges and universities, private foundations, churches, libraries, museums, cultural institutions, and other smaller groups contend daily with the possibility of losing their tax–exempt status. From qualifying and applying for that status, to maintaining and managing it, every nonprofit organization must plan and monitor ongoing procedures, activities, and forms to comply with federal, state, and local regulations.

  • Access easy checklists for reporting, compliance, eligibility, and more
  • Examine sample bylaws, applications, and forms
  • Utilize comparison charts and other visual aids for easy reference
  • Review bullet lists that compare what is and what is not acceptable

Tax Planning and Compliance for Tax–Exempt Organizations is an indispensable guide to navigating the complex maze of nonprofit tax rules and regulations.

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Preface ix

PART I QUALIFICATIONS OF TAX ]EXEMPT ORGANIZATIONS 1

CHAPTER 2 Qualifying Under IRC § 501(c)(3) 3

∗§ 2.1Organizational Test 3

∗§ 2.2Operational Test 3

CHAPTER 3 Churches 5

∗§ 3.1Types of Religious Organizations 5

§ 3.2Churches 5

CHAPTER 4 Charitable Organizations 7

§ 4.2Promotion of Social Welfare 7

∗§ 4.3Lessening Burdens of Government 7

∗§ 4.6Promotion of Health 9

CHAPTER 5 Educational, Scientific, and Literary Purposes, and Prevention of Cruelty to Children and Animals 21

§ 5.1Educational Purposes 21

§ 5.4Testing for Public Safety 22

CHAPTER 6 Civic Leagues and Local Associations of Employees: § 501(c)(4) 23

§ 6.1Comparison of (c)(3) and (c)(4) Organizations 23

§ 6.2Qualifying and Nonqualifying Civic Organizations 24

§ 6.4Neighborhood and Homeowner s Associations 26

∗§ 6.5Disclosures of Nondeductibility 26

∗CHAPTER 7 Labor, Agricultural, and Horticultural Organizations: § 501(c)(5) 27

§ 7.2Agricultural Groups 27

CHAPTER 8 Business Leagues: § 501(c)(6) 29

§ 8.2 Meaning of Common Business Interest 29

∗§ 8.3Line of Business 29

∗§ 8.4Rendering Services for Members 30

CHAPTER 9 Social Clubs: § 501(c)(7) 33

§ 9.1Organizational Requirements and Characteristics 33

∗§ 9.3Membership Requirements 34

§ 9.4 Revenue Tests 34

∗§ 9.5 Unrelated Business Income Tax 35

CHAPTER 10 Instrumentalities of Government and Title ]Holding Organizations 37

∗§ 10.2Governmental Units 37

§ 10.3Qualifying for § 501(c)(3) Status 38

CHAPTER 11 Public Charities 41

§ 11.1Distinction between Public and Private Charities 41

∗§ 11.2 Inherently Public Activity and Broad Public Support: § 509(a)(1) 41

§ 11.6 Supporting Organizations: § 509(a)(3) 45

PART II STANDARDS FOR PRIVATE FOUNDATIONS 57

CHAPTER 12 Private Foundations General Concepts 59

∗§ 12.2Special Rules Pertaining to Private Foundations 59

∗§ 12.4Termination of Private Foundation Status 60

CHAPTER 13 Excise Tax Based on Investment Income: IRC § 4940 67

∗§ 13.2Capital Gains 67

CHAPTER 14 Self ]Dealing: IRC § 4941 69

§ 14.1Definition of Self ]Dealing 69

§ 14.2Sale, Exchange, or Lease of Property 70

∗§ 14.3Loans 72

∗§ 14.4Compensation 73

∗§ 14.5Transactions That Benefit Disqualified Persons 75

§ 14.7Sharing Space, People, and Expenses 76

∗§ 14.8Indirect Deals 78

§ 14.9 Property Held by Fiduciaries 78

∗§ 14.10 Issues Once Self ]Dealing Occurs 79

CHAPTER 15 Minimum Distribution Requirements: IRC § 4942 81

§ 15.1Assets Used to Calculate Minimum Investment Return 81

§ 15.2Measuring Fair Market Value 82

§ 15.4Qualifying Distributions 82

§ 15.6Satisfying the Distribution Test 91

CHAPTER 16 Excess Business Holdings and Jeopardizing Investments: IRC §§ 4943 and 4944 95

§ 16.1Excess Business Holdings 95

§ 16.2Jeopardizing Investments 97

∗§ 16.3Program ]Related Investments 98

§ 16.4Penalty Taxes 100

CHAPTER 17 Taxable Expenditures: IRC § 4945 103

∗§ 17.1Lobbying 103

∗§ 17.3Grants to Individuals 104

∗§ 17.4Grants to Public Charities 109

∗§ 17.5Grants to Foreign Organizations 112

§ 17.8 Excise Taxes Payable 113

PART III OBTAINING AND MAINTAINING TAX ]EXEMPT STATUS 145

CHAPTER 18 IRS Filings, Procedures, and Policies 147

∗§ 18.1IRS Determination Process 147

§ 18.2Annual Filing of Forms 990 163

§ 18.3 Reporting Organizational Changes to the IRS 170

§ 18.4Weathering an IRS Examination 170

§ 18.5 When an Organization Loses Its Tax ]Exempt Status 171

CHAPTER 19 Maintaining Exempt Status 191

§ 19.1 Checklists 191

CHAPTER 20 Private Inurement and Intermediate Sanctions 197

∗§ 20.1 Defining Inurement 198

§ 20.2 Salaries and Other Compensation 199

§ 20.4 Finding Salary Statistics 199

§ 20.8 Services Rendered for Individuals 200

§ 20.10 Intermediate Sanctions 200

CHAPTER 21 Unrelated Business Income 201

§ 21.1IRS Scrutiny of Unrelated Business Income 201

∗§ 21.4 Definition of Trade or Business 202

§ 21.5 What Is Unrelated Business Income? 202

∗§ 21.7 Substantially Related 203

∗§ 21.8 Unrelated Activities 204

§ 21.10 Income Modifications 207

∗§ 21.11 Calculating and Minimizing Taxable Income 208

∗§ 21.12 Debt ]Financed Property 211

§ 21.13 Museums 213

§ 21.15 Publishing 213

CHAPTER 23 Electioneering and Lobbying 215

§ 23.1 Election Campaign Involvement 215

§ 23.2 Voter Education versus Candidate Promotion 215

CHAPTER 24 Deductibility and Disclosures 217

∗§ 24.1Overview of Deductibility 217

∗§ 24.2Substantiation and Quid Pro Quo Rules 222

CHAPTER 25 Employment Taxes 223

∗§ 25.2Ministers 223

Index 229

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Jody Blazek
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