Title Details

PART I QUALIFICATIONS OF TAX-EXEMPT ORGANIZATIONS 1

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

*§ 2.2 Operational Test 3

CHAPTER 4 Charitable Organizations 5

§ 4.2 Promotion of Social Welfare 5

§ 4.3 Lessening Burdens of Government 5

§ 4.6 Promotion of Health 6

CHAPTER 5 Educational, Scientific, and Literary Purposes, and Prevention of Cruelty to Children and Animals 17

§ 5.1 Educational Purposes 17

§ 5.4 Testing for Public Safety 18

CHAPTER 6 Civic Leagues and Local Associations of Employees: § 501(c)(4) 19

§ 6.1 Comparison of (c)(3) and (c)(4) Organizations 19

§ 6.2 Qualifying and Nonqualifying Civic Organizations 20

*§ 6.4 Neighborhood and Homeowner’s Associations 21

§ 6.5 Disclosures of Nondeductibility 22

CHAPTER 8 Business Leagues: § 501(c)(6) 23

§ 8.2 Meaning of “Common Business Interest” 23

§ 8.3 Line of Business 23

§ 8.4 Rendering Services for Members 24

CHAPTER 9 Social Clubs: § 501(c)(7) 25

§ 9.4 Revenue Tests 25

CHAPTER 10 Instrumentalities of Government and Title-Holding Organizations 27

*§ 10.2 Governmental Units 27

§ 10.3 Qualifying for § 501(c)(3) Status 27

CHAPTER 11 Public Charities 29

§ 11.1 Distinction between Public and Private Charities 29

§ 11.2 “Inherently Public Activity” and Broad Public Support § 509(a)(1) 29

§ 11.6 Supporting Organizations § 509(a)(3) 31

PART II STANDARDS FOR PRIVATE FOUNDATIONS 43

CHAPTER 12 Private Foundations—General Concepts 45

§ 12.2 Special Rules Pertaining to Private Foundations 45

§ 12.4 Termination of Private Foundation Status 46

CHAPTER 13 Excise Tax Based on Investment Income: IRC § 4940 51

§ 13.2 Capital Gains 51

CHAPTER 14 Self-Dealing: IRC § 4941 53

§ 14.1 Definition of Self-Dealing 53

§ 14.2 Sale, Exchange, or Lease of Property 54

§ 14.3 Loans 56

*§ 14.4 Compensation 57

§ 14.5 Transactions That Benefit Disqualified Persons 58

§ 14.7 Sharing Space, People, and Expenses 58

§ 14.9 Property Held by Fiduciaries 59

§ 14.10 Issues Once Self-Dealing Occurs 59

CHAPTER 15 Minimum Distribution Requirements: IRC § 4942 61

§ 15.1 Assets Used to Calculate Minimum Investment Return 61

§ 15.2 Measuring Fair Market Value 62

§ 15.4 Qualifying Distributions 62

§ 15.6 Satisfying the Distribution Test 70

CHAPTER 16 Excess Business Holdings and Jeopardizing Investments: IRC §§ 4943 and 4944 75

§ 16.1 Excess Business Holdings 75

§ 16.2 Jeopardizing Investments 77

§ 16.3 Program-Related Investments 78

§ 16.4 Penalty Taxes 80

CHAPTER 17 Taxable Expenditures: IRC § 4945 81

*§ 17.1 Lobbying 81

§ 17.3 Grants to Individuals 82

§ 17.4 Grants to Public Charities 85

§ 17.5 Grants to Foreign Organizations 87

*§ 17.8 Excise Tax Payable 88

PART III OBTAINING AND MAINTAINING TAX-EXEMPT STATUS 115

CHAPTER 18 IRS Filings, Procedures, and Policies 117

§ 18.1 Determination Process 117

§ 18.2 Annual Filing of Forms 990 128

§ 18.3 Reporting Organizational Changes to the IRS 134

§ 18.4 Weathering an IRS Examination 134

CHAPTER 19 Maintaining Exempt Status 155

§ 19.1 Checklists 155

CHAPTER 20 Private Inurement and Intermediate Sanctions 161

§ 20.1 Defining Inurement 162

§ 20.2 Salaries and Other Compensation 163

§ 20.8 Services Rendered for Individuals 163

§ 20.10 Intermediate Sanctions 163

CHAPTER 21 Unrelated Business Income 165

§ 21.1 IRS Scrutiny of Unrelated Business Income 165

*§ 21.4 Definition of Trade or Business 166

§ 21.5 What Is Unrelated Business Income? 166

§ 21.7 “Substantially Related” 166

§ 21.8 Unrelated Activities 167

§ 21.10 Income Modifications 170

§ 21.11 Calculating and Minimizing Taxable Income 171

§ 21.12 Debt-Financed Property 172

§ 21.13 Museums 173

§ 21.15 Publishing 173

CHAPTER 23 Electioneering and Lobbying 175

§ 23.1 Election Campaign Involvement 175

§ 23.2 Voter Education versus Candidate Promotion 175

CHAPTER 24 Deductibility and Disclosures 177

*§ 24.1 Overview of Deductibility 177

§ 24.2 Substantiation and Quid Pro Quo Rules 180

CHAPTER 25 Employment Taxes 181

§ 25.2 Ministers 181

Index 185