The law of tax-exempt organizations in a nutshell / by Scott A. Taylor.
2011
KF6449 .T39 2011 (Map It)
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Details
Author
Title
The law of tax-exempt organizations in a nutshell / by Scott A. Taylor.
Published
St. Paul, MN : West, [2011]
Copyright
©2011
Call Number
KF6449 .T39 2011
ISBN
9780314262349
0314262342
0314262342
Description
xxxvi, 319 pages ; 19 cm.
System Control No.
(OCoLC)747281276
Note
Includes index.
Series
Record Appears in
Table of Contents
Preface
v
Table of Cases
xix
Table of Internal Revenue Code Sections
xxiii
ch. I
Historical Origins in Charitable Trust Law
1
A.
England
1
B.
America
4
C.
The Role of Income Taxation in the Regulation of Charities
9
ch. II
Tax-Exempt Landscape
13
A.
Some Notable Types of Organizations Under [§] 501(c)(3)
13
1.
The Big Money Foundations
13
2.
Community Foundations
16
3.
The Big Public Charities
17
4.
Healthcare
19
5.
Colleges and Universities
20
6.
All Those Little Organizations
24
7.
Sports and Animals
25
B.
Important Types of Other Tax---Exempt Organizations
26
1.
Business Leagues and Similar Organizations Under [§] 501(c)(6)
26
2.
Veterans' Organizations Under [§] 501(c)(19)
27
3.
Labor Organizations Under [§] 501(c)(5)
28
4.
Social Welfare Organizations Under [§] 501(c)(4)
28
C.
The Big Legal Picture
30
ch. III
Types of Non-Profit Entities
37
A.
The Role of State Law
37
B.
The Role of Federal Law
39
1.
Nonprofit Corporations
40
2.
Charitable Trusts
44
3.
Unincorporated Associations
46
4.
Limited Liability Companies
48
5.
Specially Chartered Organizations
49
6.
Government Instrumentalities
50
ch. IV
Tax-Exempt Organizations Under IRC [§] 501(c)(3)
52
A.
Requirements for Tax---Exempt Status
52
1.
Qualifying Form as a Legal Entity
53
2.
One or More Exempt Purposes
58
a.
Charitable Purpose
61
b.
Religious Purpose
64
c.
Educational Purpose
68
i.
Schools, Colleges, and Universities
68
ii.
Other Educational Organizations
72
d.
Scientific Purpose
75
e.
Literary Purpose
77
f.
Testing for Public Safety
79
g.
Fostering National or International Amateur Sports Competition
80
h.
Preventing Cruelty to Children or Animals
81
3.
Organized and Operated to Further One or More Exempt Purposes
82
a.
Organizational Test
82
b.
Operational Test
87
4.
Private Inurement
89
5.
Carrying on Propaganda or Influencing Legislation
91
a.
Propaganda
91
b.
Influencing Legislation
92
6.
Political Campaigning
98
7.
Furthers a Public, Not a Private, Interest
101
8.
No Illegal Purpose or Contrary to Public Policy
103
a.
Illegality
103
b.
Public Policy
104
B.
System of Intermediate Sanctions
105
1.
Disqualified Person
107
2.
Excess Benefit Transaction
110
3.
Manager Liability
112
4.
Enormous Liability Potential
116
ch. V
Private Foundations---A Subspecies of the [§] 501(c)(3) Organization
118
A.
Background
118
B.
Definition---Private Foundation vs. Public Charity
121
1.
Non---Private Foundation Status Based on Public Activity
126
a.
Churches and Certain Religious Organizations
127
b.
Certain Educational Organizations
133
c.
Hospitals and Medical Research Organizations
139
d.
Endowment Funds for State Colleges and Universities
140
e.
Certain Governmental Units---A False Category
143
2.
Non-Private Foundation Status Based on Public Support
144
a.
[§] 509(a)(1)/170(b)(1)(A)(vi) Organizations
145
i.
33 1/3% Categorical Test
145
ii.
10% Facts and Circumstances Test
148
iii.
Duration Test for "Normally"
149
iv.
Community Trusts
150
b.
[§] 509(a)(2) Organizations
152
3.
Non-Private Foundations That Are Supporting Organizations Under [§] 509(a)(3)
155
a.
Relationship Test
155
b.
Organizational and Operational Tests
159
c.
No Control by One or More Disqualified Persons
160
4.
Practical Applications for Public Charities
162
C.
Private Foundations
164
1.
Private Operating Foundations
164
2.
Private Foundations That Are Grant---Making
166
3.
Exempt Operating Foundations
166
4.
Political Activities
167
5.
Tax on Net Investment Income
168
6.
The Two---Tier Excise Taxes
168
a.
[§] 4941: Tax on Self---Dealing
170
b.
[§] 4942: Taxes on Failure to Distribute Income
172
c.
[§] 4943: Taxes on Excess Business Holdings
173
d.
[§] 4944: Taxes on Investments Which Jeopardize Charitable Purpose
178
e.
[§] 4955: Taxes on Taxable Expenditures
180
7.
Termination
185
ch. VI
Charitable Giving
188
A.
A Snapshot of Charitable Giving in the United States
188
B.
Overview of the Provisions
191
1.
Income Tax: IRC [§] 170
191
2.
Gift Tax: IRC [§] 2522
192
3.
Estate Tax: [§] 2055
193
C.
Detailed View of the Charitable Deduction Provisions
194
1.
Income Tax
194
a.
Organizations Eligible to Receive Deductible Contributions
195
i.
Organizations Listed in Publication 78
196
ii.
Organizations Not Listed in Publication 78
199
a.
Churches
199
b.
Subordinate Organizations
200
c.
Small Organizations
201
d.
Governmental Units
201
e.
Organizations Not Filing Annual Returns
202
b.
Deductible Contributions and Their Amount
202
i.
Service and Out-of-Pocket Expenses
204
ii.
Special Rules for Contributions of Property
205
a.
Fractional Interests in Personal Property
205
b.
Contributing Property That Has Gone up in Value
210
c.
Property That Has Decreased in Value
213
d.
Fair Market Value
214
c.
When to Deduct
216
d.
Annual Limits on Deductions
217
i.
50% Limit
217
ii.
30% Limits
220
iii.
20% Limit
221
iv.
Special Rules for Qualified Conservation Contributions
222
v.
Ordering Rules for the Different Limits
222
vi.
Carryover Rules
223
vii.
Substantiation Rules
223
a.
Cash Contributions
223
b.
Contributions of Property
224
viii.
A Final Limitation
225
ix.
Special Rule for Corporations
225
2.
Federal Gift Tax Charitable Contribution Deduction
225
3.
Federal Estate Tax Charitable Contribution Deduction
226
ch. VII
Regulation of Charitable Fundraising
228
A.
Background
228
B.
Current State Law Regulating Charitable Solicitations
231
C.
Federal Law Regulating Charitable Fundraising
241
ch. VIII
Tax-Exempt Organizations Under Provisions Other Than [§] 501
244
A.
Those Organizations That Can Receive Tax Deductible Contributions
244
1.
Governmental Entities
245
2.
Veterans' Organizations
248
3.
Certain Fraternal Societies
251
4.
Certain Cemetery Organizations
252
B.
Those Organizations That Cannot Receive Tax Deductible Donations
253
1.
The More Important Organizations
253
a.
Social Welfare Organizations and Local Associations of Employees
253
b.
Labor and Agricultural Organizations
258
i.
Labor Organizations
258
ii.
Agricultural Organizations
259
iii.
Note on Political Expenditures
261
c.
Business Leagues
262
d.
Title Holding Companies
264
2.
Feeder Organizations
265
3.
Other Organizations of Less Importance
266
ch. IX
Tax on Unrelated Business Income and on Income From Debt-Financed Property
269
A.
Organizations Subject to UBIT
271
B.
Unrelated Trade or Business
272
1.
Trade or Business
272
2.
Regularly Carried On
273
3.
Not Substantially Related
274
4.
Excluded Activities
278
a.
Volunteer Workforce
278
b.
Convenience of Members
278
c.
Donated Merchandise
279
d.
Qualified Sponsorship Payments
279
e.
Bingo Games
281
f.
Distribution of Low Cost Articles
282
g.
Membership Lists
282
h.
Public Entertainment Activity
283
i.
Conventions and Trade Shows
283
j.
Travel Tours
284
C.
Unrelated Taxable Income
284
1.
Statutory Exclusions
285
a.
Dividends, Interest, Annuities, and Other Similar Investments
286
b.
Royalties
286
c.
Rents
287
d.
Gains Derived From the Sale of Most Property
289
e.
Certain Income From Research
290
f.
Two Important Exceptions
290
2.
Deductions
291
3.
Special Rules for Veterans' Organizations
292
D.
Income From Debt---Financed Property
293
ch. X
Gaining and Maintaining Tax-Exempt Status
295
A.
Gaining Tax-Exempt Status
295
1.
Form 1023 and Application With IRS
295
a.
EIN, Form SS---4, and Bank Account
299
b.
15---month Rule for Contributions
299
c.
Exceptions From Filing the Form 1023
301
d.
Group Exemption Determinations
301
2.
Administrative and Judicial Review of an Adverse Determination
302
3.
State Treatment of an IRS Determination
303
B.
Maintaining Tax---Exempt Status
303
1.
Ongoing Federal Reporting
303
2.
Other Tax Returns
306
Index
309