The Law of Tax-Exempt Organizations

The Law of Tax-Exempt Organizations

2021 Cumulative Supplement
12. Aufl.

von: Bruce R. Hopkins

188,99 €

Verlag: Wiley
Format: EPUB
Veröffentl.: 24.03.2021
ISBN/EAN: 9781119757689
Sprache: englisch
Anzahl Seiten: 352

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<p>About the Author xv</p> <p>Preface xvii</p> <p>About the Online Resources xix</p> <p>Book Citations xxi</p> <p><b>Part One: Introduction to the Law of Tax-Exempt Organizations</b></p> <p><b>1 Definition of and Rationales for Tax-Exempt Organizations 3</b></p> <p>§ 1.1 Definition of Nonprofit Organization 3</p> <p>(a) Nonprofit Organization Defined 3</p> <p><b>2 Overview of Nonprofit Sector and Tax-Exempt Organizations 5</b></p> <p>§ 2.1 Profile of Nonprofit Sector 5</p> <p>§ 2.2 Organization of IRS 7</p> <p>(a) IRS in General 7</p> <p>(b) Tax Exempt and Government Entities Division 8</p> <p><b>Part Two: Fundamentals of the Law Of Tax-Exempt Organizations</b></p> <p><b>3 Tax Exemption: Source and Recognition 11</b></p> <p>§ 3.2 Recognition of Tax Exemption 11</p> <p>(a) General Rules 11</p> <p>§ 3.3 Recognition of Public Charity, Private Foundation Status 11</p> <p><b>4 Organizational, Operational, and Related Tests and Doctrines 13</b></p> <p>§ 4.1 Forms of Tax-Exempt Organizations 13</p> <p>(a) General Rules 13</p> <p>§ 4.7 Commensurate Test 13</p> <p>§ 4.9 Commerciality Doctrine 13</p> <p>(e) Other Applications of Doctrine 13</p> <p>(f) Elements of Commerciality 14</p> <p>(g) IRS Ruling Policy 14</p> <p><b>5 Nonprofit Governance 17</b></p> <p>§ 5.3 Board Duties and Responsibilities 17</p> <p>(a) Duty of Care 17</p> <p>(b) Duty of Loyalty 18</p> <p>(c) Duty of Obedience 18</p> <p>§ 5.7 IRS and Governance 18</p> <p>(c) IRS Ruling Policy 18</p> <p><b>Part Three: Tax-Exempt Charitable Organizations</b></p> <p><b>6 Concept of Charitable 21</b></p> <p>§ 6.2 Public Policy Doctrine 21</p> <p>(b) Race-Based Discrimination 21</p> <p>§ 6.3 Collateral Concepts 21</p> <p>(a) Requirement of Charitable Class 21</p> <p>(i) Illegal Activities 22</p> <p><b>7 Charitable Organizations 23</b></p> <p>§ 7.2 Relief of Distressed 23</p> <p>(b) Disaster Relief Programs 23</p> <p>§ 7.4 Provision of Housing 28</p> <p>§ 7.6 Promotion of Health 28</p> <p>(a) Hospital Law in General 28</p> <p>(b) Additional Statutory Requirements for Hospitals 28</p> <p>§ 7.8 Advancement of Education 28</p> <p>§ 7.14 Fundraising Organizations 29</p> <p>(c) Other Exemption Issues 29</p> <p>§ 7.15 Instrumentalities of Government 29</p> <p>§ 7.17 Qualified Opportunity Zones 30</p> <p><b>8 Educational Organizations 33</b></p> <p>§ 8.1 Federal Tax Law Definition of Educational 33</p> <p>§ 8.3 Educational Institutions 33</p> <p>(a) Schools, Colleges, and Universities 33</p> <p>§ 8.4 Instruction of Individuals 34</p> <p>§ 8.5 Instruction of Public 34</p> <p>9 Scientific Organizations 35</p> <p>§ 9.2 Concept of Research 35</p> <p><b>10 Religious Organizations 37</b></p> <p>§ 10.1 Constitutional Law Framework 37</p> <p>(a) General Constitutional Law Principles 37</p> <p>(c) Internal Revenue Code Provisions 38</p> <p>§ 10.2 Federal Tax Law Definition of Religion 38</p> <p>(c) Abuse of Tax Exemption 38</p> <p>§ 10.3 Churches and Similar Institutions 38</p> <p>(c) Principle of Respect for Autonomy 38</p> <p>§ 10.5 Integrated Auxiliaries of Churches 38</p> <p>§ 10.7 Religious Orders 38</p> <p><b>11 Other Types of Charitable Organizations 41</b></p> <p>§ 11.2 Amateur Sports Organizations 41</p> <p>§ 11.8 Donor-Advised Funds 41</p> <p>(c) Portrait of Donor-Advised Fund Universe 41</p> <p>§ 11.9 Endowment Funds 43</p> <p>(b) College and University Endowment Tax 43</p> <p><b>12 Public Charities and Private Foundations 47</b></p> <p>§ 12.1 Federal Tax Law Definition of Private Foundation 47</p> <p>(a) Private Foundation Defined 47</p> <p>§ 12.3 Categories of Public Charities 47</p> <p>(b) Publicly Supported Charities 47</p> <p>(c) Supporting Organizations 48</p> <p>§ 12.4 Private Foundation Rules 48</p> <p>(f) Other Provisions 48</p> <p><b>Part Four: Other Tax-Exempt Organizations</b></p> <p><b>13 Social Welfare Organizations 51</b></p> <p>§ 13.1 Concept of Social Welfare 51</p> <p>(b) Benefits to Members 51</p> <p>§ 13.3 Conduct of Business 51</p> <p><b>14 Business Leagues and Similar Organizations 53</b></p> <p>§ 14.1 Concept of Business League 53</p> <p>(a) General Principles 53</p> <p>(g) Certification Programs 53</p> <p>§ 14.2 Disqualifying Activities 54</p> <p>(a) Line-of-Business Requirement 54</p> <p>(c) Performance of Particular Services 54</p> <p>(d) Private Inurement 55</p> <p>(d-1) Private Benefit 55</p> <p><b>15 Social Clubs 57</b></p> <p>§ 15.1 Social Clubs in General 57</p> <p>(b) Club Functions 57</p> <p>§ 15.4 Exceptions to Limitations 57</p> <p>§ 15.5 Taxation of Social Clubs 57</p> <p><b>16 Labor, Agricultural, and Horticultural Organizations 59</b></p> <p>§ 16.2 Agricultural Organizations 59</p> <p><b>17 Political Organizations 61</b></p> <p>§ 17.4 Public Policy Advocacy Activities 61</p> <p><b>18 Employee Benefit Funds 63</b></p> <p>§ 18.3 Voluntary Employees’ Beneficiary Associations 63</p> <p><b>19 Other Categories of Tax-Exempt Organizations 65</b></p> <p>§ 19.12 Farmers’ Cooperatives 65</p> <p>§ 19.18 Qualified Health Insurance Issuers 65</p> <p>§ 19.20 ABLE Programs 65</p> <p>§ 19.22 Governmental and Quasi-Governmental Entities 66</p> <p>(a) Intergovernmental Immunity 66</p> <p>(b) Income Exclusion Rule 66</p> <p>(c) Integral Parts of States 67</p> <p><b>Part Five: Principal Exempt Organization Laws</b></p> <p><b>20 Private Inurement and Private Benefit Doctrines 71</b></p> <p>§ 20.4 Compensation Issues 71</p> <p>(b) Determining Reasonableness of Compensation 71</p> <p>§ 20.5 Executive Compensation Tax 71</p> <p>(a) Statutory Law 71</p> <p>(b) Perspectives 72</p> <p>(c) Proposed Regulations 72</p> <p>(d) TIGTA Examination 76</p> <p>§ 20.6 Other Forms of Private Inurement 77</p> <p>(a) Rental Arrangements 77</p> <p>(b) Lending Arrangements 77</p> <p>(e) Equity Distributions 78</p> <p>(h) Tax Avoidance Schemes 78</p> <p>(i) Services Rendered 78</p> <p>(j) Business Referral Operations 78</p> <p>(m-1) Successors to For-Profit Companies 79</p> <p>§ 20.12 Private Inurement and Other Categories of Exempt Organizations 79</p> <p>§ 20.13 Private Benefit Doctrine 80</p> <p>(a) General Rules 80</p> <p>(c) Joint Venture Law 81</p> <p>(d) Perspective 81</p> <p><b>21 Intermediate Sanctions 83</b></p> <p>§ 21.4 Transactions Involved 83</p> <p>(c) Automatic Excess Benefit Transactions in General 83</p> <p>§ 21.16 Interrelationship with Private Inurement Doctrine 83</p> <p><b>22 Legislative Activities by Tax-Exempt Organizations 85</b></p> <p>§ 22.3 Lobbying by Charitable Organizations 85</p> <p>(b) Concept of Lobbying 85</p> <p>(c) Substantial Part Test 85</p> <p><b>23 Political Campaign Activities by Tax-Exempt Organizations 87</b></p> <p>§ 23.2 Prohibition on Charitable Organizations 87</p> <p>(b) Participation or Intervention 87</p> <p>§ 23.3 Political Campaign Expenditures and Tax Sanctions 87</p> <p>§ 23.6 Political Activities of Social Welfare Organizations 87</p> <p>(a) Allowable Campaign Activity 88</p> <p><b>24 Unrelated Business: Basic Rules 89</b></p> <p>§ 24.2 Definition of Trade or Business 89</p> <p>(j) Concept of Investment Plus 89</p> <p>§ 24.3 Definition of Regularly Carried On 89</p> <p>(a) General Principles 89</p> <p>(b) Determining Regularity 89</p> <p>§ 24.4A Deemed Unrelated Business Income 90</p> <p>§ 24.5 Contemporary Applications of Unrelated Business Rules 90</p> <p>(q) Other Organizations’ Exempt Functions 90</p> <p>§ 24.9 Unrelated Debt-Financed Income 90</p> <p>(c) Acquisition Indebtedness 90</p> <p>(d) Exempt Function Borrowing 91</p> <p>(e) Administrative Needs Borrowing 92</p> <p><b>25 Unrelated Business: Modifications, Exceptions, Special Rules, and Taxation 93</b></p> <p>§ 25.1 Modifications 93</p> <p>(g) Royalties 93</p> <p>(h) Rent 93</p> <p>(l-1) Income from Subsidiaries 94</p> <p> (n-1) Global Intangible Low-Taxed Income 94</p> <p>§ 25.2 Exceptions 95</p> <p>(a) Volunteer-Conducted Businesses 95</p> <p>(b) Convenience Businesses 95</p> <p>(c) Sales of Gift Items 95</p> <p>(h) Gambling 96</p> <p>§ 25.3 Special Rules 96</p> <p>§ 25.4 Fringe Benefit Rules 97</p> <p>§ 25.5 “Bucketing” Rule 97</p> <p>(a) Statutory Law 97</p> <p>(b) Final Regulations 97</p> <p>(c) Medical Marijuana Dispensary Cases 101</p> <p>§ 25.7 Deduction Rules 102</p> <p>(a) General Rules 102</p> <p>(b) Charitable Deduction 103</p> <p>(c) Specific Deduction 103</p> <p>(d) Net Operating Losses 103</p> <p><b>Part Six: Acquisition and Maintenance of Tax Exemption</b></p> <p><b>26 Exemption Recognition and Notice Processes 107</b></p> <p>§ 26.1 Recognition Application Procedure 107</p> <p>(a) Introduction 107</p> <p>(b) General Procedures 108</p> <p>(c) Completed Application 109</p> <p>(d) User Fees 110</p> <p>(e) Penalties for Perjury 110</p> <p>(g) Streamlined Application 110</p> <p>(h) Reliance on Determination Letters 110</p> <p>(i) Post-Determination Review 111</p> <p>§ 26.3 Nonprivate Foundation Status 111</p> <p>(a) Notice Requirement 111</p> <p>§ 26.4 Requirements for Social Welfare Organizations 111</p> <p>§ 26.10 Rules for Other Categories of Organizations 111</p> <p>§ 26.10A Determination Letter Requests on Form 8940 112</p> <p>(a) General Rules 112</p> <p>(b) Changes in Public Charity/Private Foundation Status 112</p> <p>§ 26.10B Withdrawal of Request for Determination Letter 113</p> <p>§ 26.11 Group Exemption Rules 114</p> <p>(a) General Rules 114</p> <p>(b) Advantages and Disadvantages of Group Exemption 114</p> <p>(c) Proposed Revised Procedures 114</p> <p>§ 26.12 Suspension of Tax Exemption 118</p> <p>§ 26.13 Notice Requirements for Social Welfare Organizations 119</p> <p>§ 26.14 Notice Requirements for Political Organizations 119</p> <p>§ 26.16 Forfeiture of Tax Exemption 119</p> <p>§ 26.17 Constitutional Law Aspects of Process 119</p> <p><b>27 Administrative and Litigation Procedures 121</b></p> <p>§ 27.1 Administrative Procedures Where Recognition Denied 121</p> <p>(a) Requests Receiving Appeals Office Consideration 121</p> <p>(b) Matters Not Receiving Appeals Office Consideration 122</p> <p>§ 27.3 Retroactive Revocation of Tax-Exempt Status 122</p> <p>§ 27.5 Revocation of Tax-Exempt Status: Litigation Procedures 123</p> <p>(a) General Rules 123</p> <p>(b) Declaratory Judgment Rules 123</p> <p>§ 27.6 IRS Examination Procedures and Practices 124</p> <p>(b) IRS Exempt Organizations Examination Guidelines 124</p> <p>(c) Church Audits 126</p> <p>§ 27.9 IRS Disclosure to State Officials 126</p> <p><b>28 Operational Requirements 127</b></p> <p>§ 28.1 Changes in Operations or Form 127</p> <p>(a) Changes in Operations 127</p> <p>§ 28.2 Annual Reporting Rules 127</p> <p>(a) Overview of Annual Information Returns 128</p> <p>(b) Content of Annual Information Returns 128</p> <p>(c) Exceptions to Reporting Requirements 131</p> <p>(e) Group Returns 132</p> <p>§ 28.5 Filing Requirements and Tax-Exempt Status 132</p> <p>§ 28.5A Pre-Revocation Notice by IRS 132</p> <p>§ 28.8 Electronic Filing Rules 133</p> <p>(d) Law Revision in 2020 133</p> <p>§ 28.9 Unrelated Business Income Tax Returns 133</p> <p>§ 28.10 IRS Document Disclosure Rules 134</p> <p>(a) Federal Tax Law Disclosure Requirements 134</p> <p>§ 28.11 Document Disclosure Obligations of Exempt Organizations 134</p> <p>(a) General Rules 134</p> <p>(d) Failure to Comply 134</p> <p>(i) Donor Information Disclosure 134</p> <p>§ 28.14 Insurance Activities 139</p> <p>(b) Commercial-Type Insurance Rules 139</p> <p>§ 28.17 Tax-Exempt Organizations and Tax Shelters 139</p> <p>§ 28.17 International Grantmaking Requirements 140</p> <p>(a) Charitable Organizations Generally 140</p> <p>(b) Private Foundations 140</p> <p>(c) Anti-Terrorist Financing Guidelines 141</p> <p>§ 28.18 Recordkeeping Requirements 141</p> <p>28A Tax-Exempt Organizations and Tax Shelters 143</p> <p>§ 28A.1 Concept of Tax Shelter 144</p> <p>§ 28A.2 Judicial Doctrines 145</p> <p>(a) Sham Transaction Doctrine 145</p> <p>(b) Economic Substance Doctrine 146</p> <p>(c) Business Purpose Doctrine 146</p> <p>(d) Substance-over-Form Doctrine 146</p> <p>(e) Step Transaction Doctrine 147</p> <p>(f) Countervailing Case Law 148</p> <p>§ 28A.3 Tax Shelter Law in General 149</p> <p>(a) IRS’s Office of Tax Shelter Analysis 149</p> <p>(b) Other IRS Initiatives 149</p> <p>(c) Reportable Transactions 150</p> <p>(d) Participation in Reportable Transactions 151</p> <p>(e) Participant Disclosure Requirements 151</p> <p>(f) Material Advisor Disclosures 152</p> <p>(g) Material Advisors Lists Requirements 153</p> <p>(h) Abusive Tax Shelter Promotion Penalty 153</p> <p>(i) Other Tax Shelter Penalties 154</p> <p>§ 28A.4 Exempt Organizations and Tax Shelter Penalties 155</p> <p>§ 28A.5 Exempt Organizations’ Involvement in Shelters 156</p> <p>(a) Transfers of Incidence of Taxation 156</p> <p>(b) Abuse of Corporations Sole 158</p> <p>(c) A Disputed Tax Shelter 159</p> <p>(d) Overvaluation Is Often Key Issue 161</p> <p>(e) “Charitable Giving” Plan Failed 161</p> <p>(f) Syndicated Conservation Easements 163</p> <p>(g) Donor-Advised Funds 164</p> <p>(h) Patient Assistance Programs 164</p> <p>(i) Other Tax Shelters in Exempt Organizations Context 165</p> <p>§ 28A.6 GAO Findings and Recommendations 166</p> <p>§ 28A.7 “Dirty Dozen” Listings 167</p> <p><b>Part Seven: Interorganizational Structures and Operational Forms</b></p> <p><b>29 Tax-Exempt Organizations and Exempt Subsidiaries 171</b></p> <p>§ 29.3 Tax-Exempt Subsidiaries of Charitable Organizations 171</p> <p>§ 29.7 Revenue from Tax-Exempt Subsidiary 171</p> <p><b>30 Tax-Exempt Organizations and For-Profit Subsidiaries 173</b></p> <p>§ 30.2 Potential of Attribution to Parent 173</p> <p>32 Tax-Exempt Organizations: Other Operations and Restructuring 175</p> <p>§ 32.1 Mergers 175</p> <p>§ 32.7 Conversions from Nonexempt to Exempt Status 175</p> <p>(b) Federal Tax Law 175</p> <p>Table of Cases 177</p> <p>Cumulative Table of IRS Revenue Rulings 207</p> <p>Cumulative Table of IRS Revenue Procedures 217</p> <p>Cumulative Table of IRS Private Determinations Cited in Text: IRS</p> <p>Private Letter Rulings, Technical Advice Memoranda, General</p> <p>Counsel Memoranda, and Chief Counsel Advice Memoranda 219</p> <p>IRS Private Letter Rulings 219</p> <p>Technical Advice Memoranda 229</p> <p>General Counsel Memoranda 230</p> <p>Chief Counsel Advice Memoranda 231</p> <p>Table of IRS Private Letter Rulings, Technical Advice Memoranda, and Counsel Memoranda 233</p> <p>Cumulative Table of Cases Discussed in Bruce R. Hopkins’ Nonprofit Counsel 263</p> <p>Cumulative Table of IRS Private Determinations Discussed in Bruce R. Hopkins’ Nonprofit Counsel 279</p> <p>Index 303</p>
<p><b>BRUCE R. HOPKINS</b> is a practicing lawyer, law professor, and public speaker. He has written 40 books, and writes a monthly newsletter, on nonprofit law subjects. He maintains a website about tax-exempt organization law at</p>

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