Exempt Organizations Research Articles

Table of Contents

AbstractIRS Provides Guidance As To Taxation of Exempt Organizations' Advocacy Communications ExpendituresIRS Publishes Article on Automatic Excess Benefit TransactionsIRS Publishes Article on Fraternal OrganizationsFinal Regulations Defining Trust Income IssuedAdministration's FY 2005 Budget to Include Exempt Organizations, Charitable Deduction ProposalsOther Developments

IRS publishes FY 2003 exempt organizations CPE text

IRS publishes FY 2003 exempt organizations CPE text

Commercial Activity and Charitable Tax-Exemption

This article looks at the relationships between three separate legal doctrines that deal with commercial activity by tax-exempt charities: the (which governs when commercial activity endangers tax exemption); the unrelated business income tax (which taxes some commercial activity); and the Moline Properties corporate-separate-identity rule (which governs how commercial activity by a subsidiary in a complex structure affects a parent or sibling corporation). After reviewing the current state of legal doctrine in these three areas and concluding that current doctrine is inadequate and contradictory, the article turns to reconstructing the applicable rules in light of the public policy concerns raised with respect to commercial activity by charities. The article identifies six potential policy concerns: (1) unfair competition between exempt and for-profit organizations; (2) protection of the corporate tax base; (3) managerial diversion from charitable mission; (4) economic efficiency; (5) measuring the worth and need for tax subsidies by exempt organizations; and (6) protecting charitable assets from liabilities generated by for-profit business activities. The article then contrasts how two different general approaches to dealing with commercial activity by charities affect these six policy concerns. The two general approaches are permitting such activity to continue tax-free in order to provide additional tax subsidies to exempt organizations versus restricting such activity by expanding the UBIT into a general commercial-activity The article concludes that the best solution to the policy concerns raised by commercial activity is to radically restructure the underlying tests for tax exemption; in absence of such radical restructuring, the article suggests that the next best approach is to restrict commercial activity by expansion of the UBIT, and provides specific doctrinal suggestions for implementing such a tax. The article also suggests that under either suggested solution, both the commerciality doctrine and corporate-seprate-identity rule as applied to exempt status should be repealed.

In Search of Profits: Measuring Income from the Unrelated Commercial Use of a Tax-Exempt Organization's Assets

Profits a tax-exempt organization earns from business activities that are not related to the organization's exempt purpose are subject to the unrelated business income tax (UBIT). This paper shows that when the taxable and tax-exempt activities are substitutes, taxable income exceeds the incremental pretax financial return from the unrelated business activity because the exempt organization cannot deduct the opportunity cost of lost exempt function revenues when computing UBIT. As a result, the exempt organization may: (1) reduce or eliminate its unrelated business activity, or (2) change the way it uses its assets for unrelated business purposes by licensing the use of its assets to an unrelated taxable organization in exchange for nontaxable royalties. The model shows that although UBIT may distort the way in which an exempt organization uses its assets, this distortion can increase social welfare.

IRS: We won't accept returns filed by exempt organizations that lack recognition of exemption

IRS: We won't accept returns filed by exempt organizations that lack recognition of exemption

Table of Contents

AbstractBush Administration Redefining Social Service Role ofNonprofitsTemporary and Proposed Intermediate Sanctions Regulations IssuedFinal Charitable Remainder Trust Regulations IssuedFinal Charitable Lead Trust Regulations IssuedIRS: We Won't Accept Returns Filed by Exempt Organizations that Lack Recognition of ExemptionIRS Stepping Up Education, Outreach, Voluntary Compliance EffortsOther Developments

The Marketing of Philanthropy and the Charitable Contributions Deduction

This article takes a fresh look at the rationale and doctrinal tests for the charitable contributions deduction under Section 170 of the Internal Revenue Code, specifically in the context of certain kinds of named or gifts subject to schedules (e.g., University chairs; commemorative bricks). The article concludes that the best explanation for the deduction is an auxiliary funding device for tax-exempt charities, and that as a result, the doctrinal tests for deductibility should be tied closely to and advance the core rationales for tax exemption. Under the community benefit theory of exemption, deductions for commermorative-type gifts subject to schedules should be allowed, since presumably these gifts advance the mission of the exempt organization and run little or no risk of tax-base impairment or unfair competition, while under economic theories of exemption, these gifts should not be deductible, because the fee schedule structure of the gift is designed to overcome free riding, which is the basic economic rationale for government subsidization of exempt organizations.

Activities of for-profit subsidiary not attributed to related exempt organization

The Nonprofit CounselVolume 17, Issue 5 p. 6-7 Article Activities of for-profit subsidiary not attributed to related exempt organization First published: 12 March 2007 https://doi.org/10.1002/npc.3870170504AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat No abstract is available for this article. Volume17, Issue5May 2000Pages 6-7 RelatedInformation

Joint committee on taxation recommends expansive exempt organizations disclosure changes

Joint committee on taxation recommends expansive exempt organizations disclosure changes

THE UNRELATED BUSINESS INCOME TAX, COST ALLOCATION, AND PRODUCTIVE EFFICIENCY

Organizations that otherwise are exempt from federal income taxes are taxed on their net income from business activities that are unrelated to their exempt purpose. This paper examines three settings in which an exempt organization receives income subject to tax. Whether the tax promotes or deters efficiency depends on the extent to which the accounting costs that are deducted for tax purposes correspond to the economic costs of the activity, excluding the cost of equity capital.

IRS survey of exempt organization practitioners underway

IRS survey of exempt organization practitioners underway

IRS rules on liquidation of for‐profit subsidiary into exempt organization

The Nonprofit CounselVolume 14, Issue 2 p. 6-7 Article IRS rules on liquidation of for-profit subsidiary into exempt organization Bruce R. Hopkins, Bruce R. HopkinsSearch for more papers by this author Bruce R. Hopkins, Bruce R. HopkinsSearch for more papers by this author First published: 12 March 2007 https://doi.org/10.1002/npc.3870140204AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat No abstract is available for this article. Volume14, Issue2February 1997Pages 6-7 RelatedInformation

Oversight subcommittee to look at exempt organizations … again

Oversight subcommittee to look at exempt organizations … again

Insurance reform bill includes exempt organizations provisions

Insurance reform bill includes exempt organizations provisions

Free rental space involving exempt organizations held related business

The Nonprofit CounselVolume 13, Issue 7 p. 3-4 Article Free rental space involving exempt organizations held related business Bruce R. Hopkins, Bruce R. HopkinsSearch for more papers by this author Bruce R. Hopkins, Bruce R. HopkinsSearch for more papers by this author First published: July 1996 https://doi.org/10.1002/npc.3870130703AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat No abstract is available for this article. Volume13, Issue7July 1996Pages 3-4 RelatedInformation

How to raise revenue without raising taxes

AbstractThis chapter summarizes the rules of the unrelated business income tax (UBIT), analyzes the federal tax treatment of common income‐producing opportunities for exempt organizations, and explains how nonprofits may structure new business opportunities to minimize or avoid UBIT.

House passes health bill, which includes new exempt organization

House passes health bill, which includes new exempt organization

Congress limiting exempt organizations' lobbying

Congress limiting exempt organizations' lobbying

IRS issues rules governing exempt organizations' lobbying and political campaign activities disclosures and taxes

IRS issues rules governing exempt organizations' lobbying and political campaign activities disclosures and taxes

Are tax law changes for exempt organizations imminent?

Are tax law changes for exempt organizations imminent?