Law of Tax-Exempt Organizations - 2020 Cumulative Supplement

Tax-exempt law explained, for lawyers and nonlawyers alike The Law of Tax-Exempt Organizations has, for decades, been the definitive single-volume source of legal information for nonprofit lawyers and managers alike. This thoroughly revised Twelfth Edition provides all the updates you need to stay current on the latest changes to tax code, regulatory, and case law developments. The 2020 Cumulative Supplement is included to ensure that you don't miss any important updates. This product also includes access to the companion website, full of additional digital resources.

List of contents

About the Author xiiiPreface xvAbout the Online Resources xviiBook Citations xixPart One: Introduction to the Law of Tax-Exempt Organizations1 Definition of and Rationales for Tax-Exempt Organizations 3
1.1 Definition of Nonprofit Organization 3(a) Nonprofit Organization Defined 32 Overview of Nonprofit Sector and Tax-Exempt Organizations 5
2.1 Profile of Nonprofit Sector 5
2.2 Organization of IRS 6(a) IRS in General 6(b) Tax Exempt and Government Entities Division 8Part Two: Fundamentals of the Law of Tax-Exempt Organizations3 Tax Exemption: Source and Recognition 11
3.2 Recognition of Tax Exemption 11(a) General Rules 11
3.3 Recognition of Public Charity, Private Foundation Status 114 Organizational, Operational, and Related Tests and Doctrines 13
4.7 Commensurate Test 13
4.9 Commerciality Doctrine 13(e) Other Applications of Doctrine 13(f) Elements of Commerciality 13(h) Contemporary Perspective on Doctrine 145 Nonprofit Governance 15
5.3 Board Duties and Responsibilities 15(a) Duty of Care 15(b) Duty of Loyalty 16(c) Duty of Obedience 16Part Three: Tax-Exempt Charitable Organizations6 Concept of Charitable 19
6.2 Public Policy Doctrine 19(b) Race-Based Discrimination 19
6.3 Collateral Concepts 19(a) Requirement of Charitable Class 19(i) Illegal Activities 207 Charitable Organizations 21
7.4 Provision of Housing 21
7.6 Promotion of Health 21(a) Hospital Law in General 21(b) Additional Statutory Requirements for Hospitals 21
7.8 Advancement of Education 22
7.17 Qualified Opportunity Zones 228 Educational Organizations 25
8.3 Educational Institutions 25(a) Schools, Colleges, and Universities 25
8.4 Instruction of Individuals 26
8.5 Instruction of Public 269 Scientific Organizations 27
9.2 Concept of Research 2710 Religious Organizations 29
10.1 Constitutional Law Framework 29(a) General Constitutional Law Purposes 29(c) Internal Revenue Code Provisions 29
10.5 Integrated Auxiliaries of Churches 29
10.7 Religious Orders 2911 Other Types of Charitable Organizations 31
11.2 Amateur Sports Organizations 31
11.9 Endowment Funds 31(b) College and University Endowment Tax 3112 Public Charities and Private Foundations 33
12.1 Federal Tax Law Definition of Private Foundation 33(a) Private Foundation Defined 33
12.3 Categories of Public Charities 33(b) Publicly Supported Charities 33(c) Supporting Organizations 33Part Four: Other Tax-Exempt Organizations13 Social Welfare Organizations 37
13.1 Concept of Social Welfare 37(b) Benefits to Members 37
13.3 Conduct of Business 3714 Business Leagues and Similar Organizations 39
14.1 Concept of Business League 39(a) General Principles 39(g) Certification Programs 39
14.2 Disqualifying Activities 40(c) Performance of Particular Services 40(d-1) Private Benefit 4015 Social Clubs 41
15.1 Social Clubs in General 41(b) Club Functions 41
15.5 Taxation of Social Clubs 4116 Labor, Agricultural, and Horticultural Organizations 43
16.2 Agricultural Organizations 4317 Political Organizations 45
17.4 Public Policy Advocacy Activities 4518 Employee Benefit Funds 47
18.3 Voluntary Employees' Beneficiary Associations 4719 Other Categories of Tax-Exempt Organizations 49
19.12 Farmers' Cooperatives 49
19.18 Qualified Health Insurance Issuers 49Part Five: Principal Exempt Organization Laws20 Private Inurement and Private Benefit Doctrines 53
20.4 Compensation Issues 53(b) Determining Reasonableness of Compensation 53
20.5 Executive Compensation Tax 53
20.6 Other Forms of Private Inurement 56(a) Rental Arrangements 56(e) Equity Distributions 56(h) Tax Avoidance Schemes 56(i) Services Rendered 56(j) Business Referral Operations 56(m-1) Successors to For-Profit Companies 56
20.12 Private Inurement and Other Categories of Exempt Organizations 57
20.13 Private Benefit Doctrine 58(a) General Rules 58(d) Perspective 5821 Intermediate Sanctions 61
21.16 Interrelationship with Private Inurement Doctrine 6122 Legislative Activities by Tax-Exempt Organizations 63
22.3 Lobbying by Charitable Organizations 63(b) Concept of Lobbying 63(c) Substantial Part Test 6323 Political Campaign Activities by Tax-Exempt Organizations 65
23.3 Political Campaign Expenditures and Tax Sanctions 65
23.6 Political Activities of Social Welfare Organizations 65(a) Allowable Campaign Activity 6524 Unrelated Business: Basic Rules 67
24.2 Definition of Trade or Business 67(j) Concept of Investment Plus 67
24.3 Definition of Regularly Carried On 67(b) Determining Regularity 67
24.4A Deemed Unrelated Business Income 67
24.5 Contemporary Applications of Unrelated Business Rules 68(q) Other Organizations' Exempt Functions 68
24.9 Unrelated Debt-Financed Income 68(c) Acquisition Indebtedness 6825 Unrelated Business: Modifications, Exceptions, Special Rules, and Taxation 69
25.1 Modifications 69(g) Royalties 69(h) Rent 69(l-1) Income from Subsidiaries 70(n-1) Global Intangible Low-Taxed Income 70
25.2 Exceptions 70(a) Volunteer-Conducted Businesses 70(b) Convenience Businesses 71(c) Sales of Gift Items 71
25.3 Special Rules 71
25.4 Fringe Benefit Rules 72(a) Statutory Law 72(b) Interim Guidance 72
25.5 "Bucketing" Rule 73(a) Statutory Law 73(b) Interim Guidance 74(c) Medical Marijuana Dispensary Cases 76Part Six: Acquisition and Maintenance of Tax Exemption26 Exemption Recognition and Notice Processes 81
26.1 Recognition Application Procedure 81(a) Introduction 81(b) General Procedures 82(c) Completed Application 83(d) User Fees 83(e) Penalties for Perjury 84(g) Streamlined Application 84(h) Reliance on Determination Letters 84(i) Post-Determination Review 85
26.3 Nonprivate Foundation Status 85(a) Notice Requirement 85
26.4 Requirements for Social Welfare Organizations 85
26.10 Rules for Other Categories of Organizations 85
26.10A Determination Letter Requests on Form 8940 86(a) General Rules 86(b) Changes in Public Charity/Private Foundation Status 86
26.10B Withdrawal of Request for Determination Letter 87
26.11 Group Exemption Rules 88(a) General Rules 88(b) Advantages and Disadvantages of Group Exemption 88(c) Import of Questionnaire 88
26.12 Suspension of Tax Exemption 91
26.13 Notice Requirements for Social Welfare Organizations 91
26.14 Notice Requirements for Political Organizations 91
26.16 Forfeiture of Tax Exemption 91
26.17 Constitutional Law Aspects of Process 9127 Administrative and Litigation Procedures 93
27.1 Administrative Procedures Where Recognition Denied 93(a) Requests Receiving Appeals Office Consideration 93(b) Matters Not Receiving Appeals Office Consideration 94
27.3 Retroactive Revocation of Tax-Exempt Status 94
27.5 Revocation of Tax-Exempt Status: Litigation Procedures 95(a) General Rules 95(b) Declaratory Judgment Rules 95
27.6 IRS Examination Procedures and Practices 96(c) Church Audits 96
27.9 IRS Disclosure to State Officials 9628 Operational Requirements 97
28.1 Changes in Operations or Form 97(a) Changes in Operations 97
28.2 Annual Reporting Rules 97(a) Overview of Annual Information Returns 98(b) Exceptions to Reporting Requirements 99(d) Group Returns 99
28.5 Filing Requirements and Tax-Exempt Status 100
28.5A Pre-revocation Notice by IRS 100
28.8 Electronic Filing Rules 100(d) Law Revision in 2020 100
28.9 Unrelated Business Income Tax Returns 101
28.10 IRS Document Disclosure Rules 101(a) Federal Tax Law Disclosure Requirements 101
28.11 Document Disclosure Obligations of Exempt Organizations 101(a) General Rules 101(d) Failure to Comply 102(i) Donor Information Disclosure 102
28.17 Tax-Exempt Organizations and Tax Shelters 105
28.17 International Grantmaking Requirements 105(a) Charitable Organizations Generally 105(b) Private Foundations 106(c) Anti-Terrorist Financing Guidelines 106
28.18 Recordkeeping Requirements 10628A Tax-Exempt Organizations and Tax Shelters 107
28A.1 Concept of Tax Shelter 108
28A.2 Judicial Doctrines 109(a) Sham Transaction Doctrine 109(b) Economic Substance Doctrine 110(c) Business Purpose Doctrine 110(d) Substance-over-Form Doctrine 110(e) Step Transaction Doctrine 111(f) Countervailing Case Law 112
28A.3 Tax Shelter Law in General 112(a) IRS's Office of Tax Shelter Analysis 113(b) Other IRS Initiatives 113(c) Reportable Transactions 114(d) Participation in Reportable Transactions 115(e) Participant Disclosure Requirements 115(f) Material Advisor Disclosures 116(g) Material Advisors Lists Requirements 116(h) Abusive Tax Shelter Promotion Penalty 117(i) Other Tax Shelter Penalties 117
28A.4 Exempt Organizations and Tax Shelter Penalties 118
28A.5 Exempt Organizations' Involvement in Shelters 120(a) Transfers of Incidence of Taxation 120(b) Abuse of Corporations Sole 122(c) A Disputed Tax Shelter 122(d) Overvaluation is Often Key Issue 124(e) "Charitable Giving" Plan Failed 125(f) Syndicated Conservation Easements 126(g) Donor-Advised Funds 127(h) Patient Assistance Programs 128(i) Other Tax Shelters in Exempt Organizations Context 128
28A.6 GAO Findings and Recommendations 129
28A.7 "Dirty Dozen" Listings 131Part Seven: Interorganizational Structures and Operational Forms29 Tax-Exempt Organizations and Exempt Subsidiaries 135
29.3 Tax-Exempt Subsidiaries of Charitable Organizations 135
29.7 Revenue from Tax-Exempt Subsidiary 13530 Tax-Exempt Organizations and For-Profit Subsidiaries 137
30.2 Potential of Attribution to Parent 13732 Tax-Exempt Organizations: Other Operations and Restructuring 139
32.1 Mergers 139
32.7 Conversions from Nonexempt to Exempt Status 139(b) Federal Tax Law 139Table of Cases 141Cumulative Table of IRS Revenue Rulings 171Cumulative Table of IRS Revenue Procedures 181Cumulative Table of IRS Private Determinations Cited in Text 183Table of IRS Private Letter Rulings, Technical Advice Memoranda, and Counsel Memoranda 197Cumulative Table of Cases Discussed in Bruce R. Hopkins' Nonprofit Counsel 227Cumulative Table of IRS Private Determinations Discussed in Bruce R. Hopkins' Nonprofit Counsel 241Index 263

Summary

Tax-exempt law explained, for lawyers and nonlawyers alike The Law of Tax-Exempt Organizations has, for decades, been the definitive single-volume source of legal information for nonprofit lawyers and managers alike. This thoroughly revised Twelfth Edition provides all the updates you need to stay current on the latest changes to tax code, regulatory, and case law developments. The 2020 Cumulative Supplement is included to ensure that you don't miss any important updates. This product also includes access to the companion website, full of additional digital resources.

Product details

• Authors: Bruce R Hopkins, Bruce R. Hopkins
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Paperback / Softback
• Released: 31.03.2020
• EAN: 9781119639213
• ISBN: 978-1-119-63921-3
• No. of pages: 304
• Series: Wiley Nonprofit Authority
• Subjects: Social sciences, law, business > Business > Business administration; Steuerrecht, Recht, Business & management, Wirtschaft u. Management, Gemeinnützige Organisationen / Recht, Non-Profit Organizations / Law