Tax Planning and Compliance for Tax-Exempt Organizations, 2022 Cumulative Supplement

by Blazek, Jody

• ISBN13: 9781394179763
• ISBN10: 1394179766
• Edition: 6th
• Format: Paperback
• Copyright: 2023-05-02
• Publisher: Wiley

Summary

An essential, timesaving guide for accountants, lawyers, nonprofit executives and directors, consultants, and volunteers – Completely updated for 2023

This book is an indispensable guide to navigating the complex maze of nonprofit tax rules and regulations. A clear and fully cited description of the requirements for the various categories of tax-exempt entities from public charities, private foundations, civic associations, business leagues, and social clubs to title-holding companies and governmental entities can be found. Practical guidance on potential for income tax on revenue-producing enterprises along with explanations of many exceptions to taxability is provided. Issues raised by Internet activity, advertising, publishing, providing services, and much more are explained.

This useful annual supplement for 2023 will cover any and all changes and updates to the law within the previous 12 month period and will keep accountants, attorneys, and others up-to-date for the year ahead.

• Features a variety of sample documents for private foundations, including penalty abatement requests and sharing space agreements
• Provides helpful practice aids, such as a comparison of the differences between public and private charities, charts reflecting lobbying limits for different types of entities, and listings of rulings and cases that illustrate permissible activity for each type of organizations compared to impermissible activity

Table of Contents

Preface        ix

Part I Qualifications Of Tax-Exempt Organizations     1

Chapter 1 Distinguishing Characteristics of Tax-Exempt Organizations      3

§ 1.4      Role of the Internal Revenue Service 3

§ 1.8      Developments Responding to COVID-19      16

Chapter 2 Qualifying Under IRC § 501(c)(3)        25

§ 2.2      Operational Test         25

Chapter 3 Religious Organizations   33

§ 3.2      Churches         33

Chapter 4 Charitable Organizations 37

§ 4.1      Relief of the Poor       37

§ 4.3      Lessening the Burdens of Government          39

§ 4.5      Advancement of Education and Science        39

§ 4.6      Promotion of Health   42

Chapter 5 Educational, Scientific, and Literary Purposes and Prevention of Cruelty to Children and Animals 43

§ 5.1      Educational Purposes 43

Chapter 6 Civic Leagues and Local Associations of Employees: § 501(c)(4)      45

§ 6.2      Qualifying and Nonqualifying Civic Organizations  45

Chapter 9 Social Clubs: § 501(c)(7)  49

§ 9.1      Organizational Requirements and Characteristics     49

§ 9.4      Revenue Tests 50

Chapter 10         Instrumentalities of Government and Title-Holding Corporations     51

§ 10.6    Requirements for IRC §501(c)(8) and (c)(10)           51

Chapter 11         Public Charities     59

§ 11.2    “Inherently Public Activity” and Broad Public Support: § 509(a)(1)  59

§ 11.5    Difference Between § 509(a)(1) and § 509(a)(2)       60

§ 11.9    Supporting Organization: §509(a)(3) 60

Part II         STANDARDS FOR PRIVATE FOUNDATIONS         61

Chapter 12         Private Foundations—General Concepts       63

§ 12.4    Termination of Private Foundation Status     63

Chapter 13         Excise Tax Based on Investment Income: IRC §4940      65

§ 13.2    Capital Gains  65

Chapter 14         Self-Dealing: IRC § 4941  67

§ 14.2    Sale, Exchange, or Lease of Property 67

§ 14.5    Transactions That Benefit Disqualified Persons        67

Chapter 15         Minimum Distribution Requirements: IRC § 4942   69

§ 15.1    Assets Used to Calculate Minimum Investment Return        69

§ 15.2    Measuring Fair Market Value 70

§ 15.4    Qualifying Distributions        72

Chapter 16         Excess Business Holdings and Jeopardizing Investments: IRC §§ 4943 and 4944  77

§ 16.1    Excess Business Holdings      77

§ 16.2    Jeopardizing Investments       78

Chapter 17         Taxable Expenditures: IRC § 4945      79

§ 17.3    Grants to Individuals  79

§ 17.4    Grants to Public Charities      84

Part III       OBTAINING AND MAINTAINING TAX-EXEMPT STATUS     87

Chapter 18         IRS Filings, Procedures, and Policies   89

§ 18.1    IRS Determination Process    92

§ 18.2    Annual Filing of Forms 990   107

§ 18.3    Reporting Organizational Changes to the IRS           116

§ 18.4 Weathering an IRS Examination           116

Chapter 19         Maintaining Exempt Status       123

§ 19.1    Checklists       123

Chapter 20         Private Inurement and Intermediate Sanctions        131

§ 20.2    Salaries and Other Compensation      131

§ 20.10  Intermediate Sanctions           132

§ 20.11  New § 4960 Excise Tax on Excess Compensation    142

Chapter 21         Unrelated Business Income        147

§ 21.4    Definition of Trade or Business         147

§ 21.8    Unrelated Activities   148

§ 21.10  Income Modifications 148

§ 21.11  Calculating and Minimizing Taxable Income            149

Chapter 23         Electioneering and Lobbying     153

§ 23.3    Tax on Political Expenditures 153

Chapter 24         Deductibility and Disclosures    157

§ 24.1    Overview of Deductibility     157

§ 24.2    The Substantiation and Quid Pro Quo Rules 160

§ 24.3    Valuing Donor Benefits         161

Chapter 25         Employment Taxes 163

§ 25.1    Distinctions Between Employees and Independent Contractors       163

§ 25.3 Reporting Requirements 167

Chapter 27         Cryptocurrency     169

§ 27.1    What Is Cryptocurrency?       169

§ 27.2    What Are the Various Kinds of Cryptocurrency?      170

§ 27.3    Should Nonprofits Be Involved in Cryptocurrency? 171

§ 27.4    Cryptocurrencies and the Internal Revenue Service  173

Index 185