Tax planning and compliance for tax-exempt organizations : rules, checklists, procedures / Jody Blazek.
2012
KF6449 .B58 2012 (Map It)
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Details
Author
Title
Tax planning and compliance for tax-exempt organizations : rules, checklists, procedures / Jody Blazek.
Published
Hoboken, N.J. : John Wiley & Sons, Inc., [2012]
Copyright
©2012
Call Number
KF6449 .B58 2012
Edition
Fifth edition.
Holding Record
ISBN
9780470903445 (cloth)
0470903449 (cloth)
0470903449 (cloth)
Description
xxvi, 867 pages : illustrations ; 26 cm
System Control No.
(OCoLC)744299280
Note
Includes index.
Record Appears in
Table of Contents
List of Exhibits
xiii
Preface
xvii
About the Authors
xxiii
Acknowledgments
xxv
pt. I
QUALIFICATIONS OF TAX-EXEMPT ORGANIZATIONS
1
ch. 1
Distinguishing Characteristics of Tax-Exempt Organizations
3
1.1.
Differences between Exempt and Nonexempt Organizations
10
1.2.
Nomenclature
13
1.3.
Ownership and Control
13
1.4.
Role of the Internal Revenue Service
14
1.5.
Suitability as an Exempt Organization
15
1.6.
Start-Up Tax and Financial Considerations
18
1.7.
Choosing the Best Form of Organization
22
ch. 2
Qualifying Under IRC [§]501(c)(3)
27
2.1.
Organizational Test
29
2.2.
Operational Test
35
ch. 3
Religious Organizations
59
3.1.
Types of Religious Organizations
59
3.2.
Churches
64
3.3.
Religious Orders
72
3.4.
Religious and Apostolic Associations
72
ch. 4
Charitable Organizations
75
4.1.
Relief of the Poor
77
4.2.
Promotion of Social Welfare
79
4.3.
Lessening the Burdens of Government
88
4.4.
Advancement of Religion
90
4.5.
Advancement of Education and Science
90
4.6.
Promotion of Health
91
4.7.
Cooperative Hospital Service Organizations
110
ch. 5
Educational, Scientific, and Literary Purposes and Prevention of Cruelty to Children and Animals
111
5.1.
Educational Purposes
111
5.2.
Literary Purposes
126
5.3.
Scientific Purposes
127
5.4.
Testing for Public Safety
132
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)
133
5.6.
Prevention of Cruelty to Children or Animals
134
ch. 6
Civic Leagues and Local Associations of Employees: [§]501(c)(4)
135
6.1.
Comparison of (c)(3) and (c)(4) Organizations
137
6.2.
Qualifying and Nonqualifying Civic Organizations
141
6.3.
Local Associations of Employees
143
6.4.
Neighborhood and Homeowner's Associations
145
6.5.
Disclosures of Nondeductibility
148
ch. 7
Labor, Agricultural, and Horticultural Organizations: [§]501(c)(5)
157
7.1.
Labor Unions
158
7.2.
Agricultural Groups
163
7.3.
Horticultural Groups
166
7.4.
Disclosures of Nondeductibility
166
ch. 8
Business Leagues: [§]501(c)(6)
169
8.1.
Basic Characteristics
170
8.2.
Meaning of "Common Business Interest"
170
8.3.
Line of Business
172
8.4.
Rendering Services for Members
174
8.5.
Sources of Revenue
180
8.6.
Membership Categories
180
8.7.
Member Inurement
182
8.8.
Chambers of Commerce and Boards of Trade
183
8.9.
Comparison to [§]501(c)(5)
183
8.10.
Recognition of Exempt Status
184
8.11.
Formation of a Related Charitable Organization
185
8.12.
Disclosures for Lobbying and Nondeductibility
186
ch. 9
Social Clubs: [§]501(c)(7)
189
9.1.
Organizational Requirements and Characteristics
190
9.2.
Member Inurement Prohibited
193
9.3.
Membership Requirements
194
9.4.
Revenue Tests
196
9.5.
Unrelated Business Income Tax
198
9.6.
Filing and Disclosure Requirements
203
ch. 10
Instrumentalities of Government and Title-Holding Corporations
205
10.1.
[§]501(c)(1) Instrumentalities of the United States
205
10.2.
Governmental Units
206
10.3.
Qualifying for [§]501(c)(3) Status
210
10.4.
[§]501(c)(2) Title-Holding Corporations
220
10.5.
[§]501(c)(25) Title-Holding Corporations
225
ch. 11
Public Charities
227
11.1.
Distinctions between Public and Private Charities
228
11.2.
"Inherently Public Activity" and Broad Public Support: [§]509(a)(1)
232
11.3.
Community Foundations
243
11.4.
Service-Providing Organizations: [§]509(a)(2)
250
11.5.
Difference between [§]509(a)(1) and [§]509(a)(2)
253
11.6.
Supporting Organizations: [§]509(a)(3)
260
11.7.
Testing for Public Safety: [§]509(a)(4)
271
pt. II
STANDARDS FOR PRIVATE FOUNDATIONS
273
ch. 12
Private Foundations---General Concepts
275
12.1.
Why Private Foundations Are Special
275
12.2.
Special Rules Pertaining to Private Foundations
278
12.3.
Application of Taxes to Certain Nonexempt Trusts
285
12.4.
Termination of Private Foundation Status
286
Appendix 12-1
Brief Description of Tax Sanctions Applicable to Private Foundations
307
ch. 13
Excise Tax Based on Investment Income: IRC [§]4940
311
13.1.
Formula for Taxable Income
312
13.2.
Capital Gains
319
13.3.
Ponzi Scheme Losses
324
13.4.
Deductions from Gross Investment Income
325
13.5.
Tax-Planning Ideas
330
13.6.
Foreign Foundations
334
13.7.
Timely Payment of Excise Tax
336
13.8.
Exempt Operating Foundations
337
ch. 14
Self-Dealing: IRC [§]4941
339
14.1.
Definition of Self-Dealing
340
14.2.
Sale, Exchange, or Lease of Property
343
14.3.
Loans
350
14.4.
Compensation
352
14.5.
Transactions That Benefit Disqualified Persons
363
14.6.
Payments to Government Officials
369
14.7.
Sharing Space, People, and Expenses
370
14.8.
Indirect Deals
374
14.9.
Property Held by Fiduciaries
375
14.10.
Issues Once Self-Dealing Occurs
379
ch. 15
Minimum Distribution Requirements: IRC [§]4942
385
15.1.
Assets Used to Calculate Minimum Investment Return
386
15.2.
Measuring Fair Market Value
393
15.3.
Distributable Amount
398
15.4.
Qualifying Distributions
401
15.5.
Private Operating Foundations
413
15.6.
Satisfying the Distribution Test
422
ch. 16
Excess Business Holdings and Jeopardizing Investments: IRC [§][§]4943 and 4944
427
16.1.
Excess Business Holdings
427
16.2.
Jeopardizing Investments
435
16.3.
Program-Related Investments
440
16.4.
Penalty Taxes
444
ch. 17
Taxable Expenditures: IRC [§]4945
449
17.1.
Lobbying
451
17.2.
Voter Registration Drives
456
17.3.
Grants to Individuals
457
17.4.
Grants to Public Charities
470
17.5.
Grants to Foreign Organizations
482
17.6.
Expenditure Responsibility Grants
487
17.7.
Noncharitable Expenditures
500
17.8.
Excise Taxes Payable
501
Appendix 17-1
Examples of Emergency, Hardship Grant Application, and Church and Foreign Equivalency Grants
504
pt. III
OBTAINING AND MAINTAINING TAX-EXEMPT STATUS
531
ch. 18
IRS Filings, Procedures, and Policies
533
18.1.
IRS Determination Process
535
18.2.
Annual Filing of Forms 990
543
18.3.
Reporting Organizational Changes to the IRS
553
18.4.
Weathering an IRS Examination
559
18.5.
When Organization Loses Its Tax-Exempt Status
564
ch. 19
Maintaining Exempt Status
565
19.1.
Checklists
565
ch. 20
Private Inurement and Intermediate Sanctions
587
20.1.
Defining Inurement
589
20.2.
Salaries and Other Compensation
591
20.3.
Finding Salary Statistics
593
20.4.
Housing and Meals
597
20.5.
Purchase, Lease, or Sale of Property or Services
598
20.6.
Loans and Guarantees
600
20.7.
For-Profit to Nonprofit and Vice Versa
601
20.8.
Services Rendered for Individuals
602
20.9.
Joint Ventures
604
20.10.
Intermediate Sanctions
605
ch. 21
Unrelated Business Income
621
21.1.
IRS Scrutiny of Unrelated Business Income
623
21.2.
History of the Unrelated Business Income Tax
624
21.3.
Consequences of Receiving UBI
625
21.4.
Definition of Trade or Business
627
21.5.
What Is Unrelated Business Income?
629
21.6.
"Regularly Carried On"
630
21.7.
"Substantially Related"
632
21.8.
Unrelated Activities
637
21.9.
The Exceptions
655
21.10.
Income Modifications
662
21.11.
Calculating and Minimizing Taxable Income
672
21.12.
Debt-Financed Property
676
21.13.
Museums
682
21.14.
Travel Tours
684
21.15.
Publishing
685
ch. 22
Relationships with Other Organizations and Businesses
689
22.1.
Creation of (c)(3) by (c)(4), (5), or (6)
690
22.2.
Alliances with Investors
694
22.3.
Creation of a For-Profit Corporate Subsidiary
700
22.4.
Active Business Relationships
703
ch. 23
Electioneering and Lobbying
707
23.1.
Election Campaign Involvement
708
23.2.
Voter Education versus Candidate Promotion
714
23.3.
Tax on Political Expenditures
719
23.4.
Lobbying Activity of [§]501(c)(3) Organizations
732
23.5.
Permissible Amounts of Lobbying
739
23.6.
Lobbying Limits for [§]501(c)(4), (5), (6), and Other Exempt Organizations
742
23.7.
Advocacy and Nonpartisan Analysis
743
ch. 24
Deducibility and Disclosures
747
24.1.
Overview of Deductibility
747
24.2.
The Substantiation and Quid Pro Quo Rules
759
24.3.
Valuing Donor Benefits
769
24.4.
Unrelated Business Income Aspects of Fund-Raising
773
24.5.
State and Local Regulations
774
Appendix 24-1
The Unified Registration Statement, A Checklist for Initial Registrations
775
ch. 25
Employment Taxes
777
25.1.
Distinctions Between Employees and Independent Contractors
778
25.2.
Ministers
786
25.3.
Reporting Requirements
790
ch. 26
Mergers, Bankruptcies, and Terminations
795
26.1.
Mergers and Other Combinations
795
26.2.
Bankruptcy
800
26.3.
Terminations
803
Table of Cases
805
Table of IRS Revenue Rulings
817
Table of IRS Revenue Procedures
823
Index
825