Preface ix Part I Qualifications of Tax-Exempt Organizations 1 Chapter 2 Qualifying Under IRC 501(c)(3) 3 2.1 Organizational Test 3 2.2 Operational Test 4 Chapter 4 Charitable Organizations 7 4.1 Relief of the Poor 7 4.2 Promotion of Social Welfare 7 4.3 Lessening Burdens of Government 8 4.6 Promotion of Health 9 Chapter 5 Educational, Scientific, and Literary Purposes, and Prevention of Cruelty to Children and Animals 21 5.1 Educational Purposes 21 5.

4 Testing for Public Safety 22 Chapter 6 Civic Leagues and Local Associations of Employees: 501(c)(4) 23 6.1 Comparison of (c)(3) and (c)(4) Organizations 23 6.2 Qualifying and Nonqualifying Civic Organizations 25 6.4 Neighborhood and Homeowner''s Associations 27 6.5 Disclosures of Nondeductibility 27 Chapter 7 Labor, Agricultural, and Horticultural Organizations: 501(c)(5) 29 7.2 Agricultural Groups 29 7.4 Disclosure of Nondeductibility 29 Chapter 8 Business Leagues: 501(c)(6) 31 8.2 Meaning of "Common Business Interest" 31 8.

3 Line of Business 31 8.4 Rendering Services for Members 32 Chapter 9 Social Clubs: 501(c)(7) 35 9.1 Organizational Requirements and Characteristics 35 9.3 Membership Requirements 36 9.4 Revenue Tests 37 9.5 Unrelated Business Income Tax 37 Chapter 10 Instrumentalities of Government and Title-Holding Organizations 39 10.2 Governmental Units 39 10.3 Qualifying for 501(c)(3) Status 40 Chapter 11 Public Charities 43 11.

1 Distinction between Public and Private Charities 43 11.2 "Inherently Public Activity" and Broad Public Support: 509(a)(1) 43 11.3 Community Foundations 47 11.6 Supporting Organizations: 509(a)(3) 51 Part II Standards for Private Foundations 63 Chapter 12 Private Foundations--General Concepts 65 12.2 Special Rules Pertaining to Private Foundations 65 12.4 Termination of Private Foundation Status 66 Chapter 13 Excise Tax Based on Investment Income: IRC 4940 73 13.1 Formula for Taxable Income 73 13.2 Capital Gains 74 13.

2A Tax on Private Colleges and Universities 76 Chapter 14 Self-Dealing: IRC 4941 77 14.1 Definition of Self-Dealing 78 14.2 Sale, Exchange, or Lease of Property 78 14.3 Loans 81 14.4 Compensation 82 14.5 Transactions That Benefit Disqualified Persons 83 14.7 Sharing Space, People, and Expenses with Family Office 85 14.8 Indirect Deals 87 14.

9 Property Held by Fiduciaries 87 14.10 Issues Once Self-Dealing Occurs 88 Chapter 15 Minimum Distribution Requirements: IRC 4942 89 15.1 Assets Used to Calculate Minimum Investment Return 89 15.2 Measuring Fair Market Value 90 15.4 Qualifying Distributions 91 15.6 Satisfying the Distribution Test 101 Chapter 16 Excess Business Holdings and Jeopardizing Investments: IRC §4943 and 4944 105 16.1 Excess Business Holdings 105 16.2 Jeopardizing Investments 108 16.

3 Program-Related Investments 109 16.4 Penalty Taxes 111 Chapter 17 Taxable Expenditures: IRC 4945 113 17.1 Lobbying 113 17.3 Grants to Individuals 114 17.4 Grants to Public Charities 125 17.5 Grants to Foreign Organizations 132 17.8 Excise Taxes Payable 133 Part III Obtaining and Maintaining Tax-Exempt Status 157 Chapter 18 IRS Filings, Procedures, and Policies 159 18.1 IRS Determination Process 159 18.

2 Annual Filing of Forms 990 169 18.3 Reporting Organizational Changes to the IRS 176 18.4 Weathering an IRS Examination 177 18.5 When an Organization Loses Its Tax-Exempt Status 178 Chapter 19 Maintaining Exempt Status 197 19.1 Checklists 197 Chapter 20 Private Inurement and Intermediate Sanctions 203 20.1 Defining Inurement 204 20.2 Salaries and Other Compensation 205 20.4 Finding Salary Statistics 205 20.

8 Services Rendered for Individuals 206 20.10 Intermediate Sanctions 206 Chapter 21 Unrelated Business Income 209 21.1 IRS Scrutiny of Unrelated Business Income 209 21.4 Definition of Trade or Business 210 21.5 What Is Unrelated Business Income? 211 21.7 "Substantially Related" 211 21.8 Unrelated Activities 213 21.10 Income Modifications 216 21.

11 Calculating and Minimizing Taxable Income 217 21.12 Debt-Financed Property 223 21.13 Museums 224 21.15 Publishing 224 Chapter 23 Electioneering and Lobbying 225 23.1 Election Campaign Involvement 225 23.2 Voter Education versus Candidate Promotion 225 Chapter 24 Deductibility and Disclosures 227 24.1 Overview of Deductibility 227 24.2 Substantiation and Quid Pro Quo Rules 232 Chapter 25 Employment Taxes 233 25.

2 Ministers 233 Index 239.