A Letter to the Reader xv About the Author xvii Preface xix About the Online Resources xxi Book Citations xxiii Part One: Introduction to the Law Of Tax-exempt Organizations 1 Definition of and Rationales for Tax-Exempt Organizations 3 § 1.1 Definition of Nonprofit Organization 3 (a) Nonprofit Organization Defined 3 § 1.2 Definition of Tax-Exempt Organization 4 2 Overview of Nonprofit Sector and Tax-Exempt Organizations 5 § 2.1 Profile of Nonprofit Sector 5 § 2.2 Organization of IRS 7 (a) IRS in General 7 (a-1) Prospective Restructuring of IRS 7 (b) Tax Exempt and Government Entities Division 8 Part Two: Fundamentals of the Law Of Tax-exempt Organizations 3 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 11 4 Organizational, Operational, and Related Tests and Doctrines 13 § 4.1 Forms of Tax-Exempt Organizations 13 (a) General Rules 13 § 4.
3 Organizational Test 13 (b) Dissolution Requirements 14 § 4.5 Operational Test 14 (a) Basic Rules 14 § 4.7 Commensurate Test 14 § 4.8 State Action Doctrine 14 (d) Statutory Law 14 § 4.9 Commerciality Doctrine 14 (e) Other Applications of Doctrine 14 (f) Elements of Commerciality 15 (g) IRS Ruling Policy 15 (h) Contemporary Perspective on Doctrine 16 5 Nonprofit Governance 17 § 5.3 Board Duties and Responsibilities 17 (a) Duty of Care 17 (b) Duty of Loyalty 18 (c) Duty of Obedience 18 § 5.7 IRS and Governance 19 (c) IRS Ruling Policy 19 Part Three: Tax-exempt Charitable Organizations 6 Concept of Charitable 23 § 6.2 Public Policy Doctrine 23 (b) Race-Based Discrimination 23 § 6.
3 Collateral Concepts 23 (a) Requirement of Charitable Class 23 (i) Illegal Activities 24 7 Charitable Organizations 27 § 7.2 Relief of Distressed 27 (b) Disaster Relief Programs 27 § 7.4 Provision of Housing 32 § 7.6 Promotion of Health 32 (a) Hospital Law in General 32 (b) Additional Statutory Requirements for Hospitals 33 § 7.7 Lessening Burdens of Government 34 § 7.8 Advancement of Education 34 § 7.11 Promotion of Social Welfare 35 § 7.14 Fundraising Organizations 35 (c) Other Exemption Issues 35 § 7.
15 Instrumentalities of Government 36 § 7.16 Other Categories of Charity 36 (a) Environmental Protection 36 (e) Local Economic Development 36 § 7.17 Qualified Opportunity Zones 36 8 Educational Organizations 39 § 8.1 Federal Tax Law Definition of Educational 39 § 8.3 Educational Institutions 39 (a) Schools, Colleges, and Universities 39 § 8.4 Instruction of Individuals 40 § 8.5 Instruction of Public 40 9 Scientific Organizations 41 § 9.2 Concept of Research 41 10 Religious Organizations 43 § 10.
1 Constitutional Law Framework 43 (a) General Constitutional Law Principles 43 (c) Internal Revenue Code Provisions 44 § 10.2 Federal Tax Law Definition of Religion 44 (c) Abuse of Tax Exemption 44 § 10.3 Churches and Similar Institutions 44 (c) Principle of Respect for Autonomy 44 § 10.5 Integrated Auxiliaries of Churches 44 § 10.7 Religious Orders 45 11 Other Types of Charitable Organizations 47 § 11.2 Amateur Sports Organizations 47 § 11.8 Donor-Advised Funds 47 (b) Statutory Criteria 47 (c) Portrait of Donor-Advised Fund Universe 47 (d) Litigation 49 § 11.9 Endowment Funds 50 (b) College and University Endowment Tax 50 12 Public Charities and Private Foundations 55 § 12.
1 Federal Tax Law Definition of Private Foundation 55 (a) Private Foundation Defined 55 § 12.3 Categories of Public Charities 55 (b) Publicly Supported Charities 55 (c) Supporting Organizations 56 § 12.4 Private Foundation Rules 56 (f) Other Provisions 56 Part Four: other Tax-exempt Organizations 13 Social Welfare Organizations 59 § 13.1 Concept of Social Welfare 59 (b) Benefits to Members 59 § 13.3 Conduct of Business 59 14 Business Leagues and Similar Organizations 61 § 14.1 Concept of Business League 61 (a) General Principles 61 (g) Certification Programs 61 § 14.2 Disqualifying Activities 62 (a) Line-of-Business Requirement 62 (c) Performance of Particular Services 62 (d) Private Inurement 63 (d-1) Private Benefit 63 15 Social Clubs 65 § 15.1 Social Clubs in General 65 (b) Club Functions 65 § 15.
4 Exceptions to Limitations 65 § 15.5 Taxation of Social Clubs 65 16 Labor, Agricultural, and Horticultural Organizations 67 § 16.1 Labor Organizations 67 § 16.2 Agricultural Organizations 67 17 Political Organizations 69 § 17.4 Public Policy Advocacy Activities 69 § 17.5 Taxation of Political Organizations 69 18 Employee Benefit Funds 71 § 18.3 Voluntary Employees'' Beneficiary Associations 71 19 Other Categories of Tax-Exempt Organizations 73 § 19.4 Fraternal Organizations 73 (a) Fraternal Beneficiary Societies 73 § 19.
6 Cemetery Companies 73 § 19.11 Veterans'' Organizations 73 (a) General Rules 73 § 19.12 Farmers'' Cooperatives 74 § 19.14 Homeowners'' Associations 74 § 19.18 Qualified Health Insurance Issuers 74 § 19.20 ABLE Programs 74 § 19.22 Governmental and Quasi-Governmental Entities 75 (a) Intergovernmental Immunity 75 (b) Income Exclusion Rule 75 (c) Integral Parts of States 75 § 19.24 Other Categories of Tax-Exempt Organizations 75 Part Five: Principal Exempt Organization Laws 20 Private Inurement and Private Benefit Doctrines 79 § 20.
4 Compensation Issues 79 (b) Determining Reasonableness of Compensation 79 § 20.5 Executive Compensation Tax 80 (a) Statutory Law 80 (b) Perspectives 80 (c) Regulations 81 (d) TIGTA Examination 85 § 20.6 Other Forms of Private Inurement 85 (a) Rental Arrangements 85 (b) Lending Arrangements 86 (c) Sales of Assets 86 (e) Equity Distributions 86 (h) Tax Avoidance Schemes 86 (i) Services Rendered 86 (j) Business Referral Operations 87 (l) Retained Interests 87 (m-1) Successors to For-Profit Companies 87 § 20.12 Private Inurement and Other Categories of Exempt Organizations 88 § 20.13 Private Benefit Doctrine 89 (a) General Rules 89 (c) Joint Venture Law 90 (d) Perspective 90 21 Intermediate Sanctions 91 § 21.3 Disqualified Persons 91 § 21.4 Transactions Involved 91 (c) Automatic Excess Benefit Transactions in General 91 § 21.16 Interrelationship with Private Inurement Doctrine 92 22 Legislative Activities by Tax-Exempt Organizations 93 § 22.
3 Lobbying by Charitable Organizations 93 (b) Concept of Lobbying 93 (c) Substantial Part Test 93 (d) Expenditure Test 93 § 22.3 Legislative Activities of Business Leagues 94 (a) Business Expense Deduction Disallowance Rules 94 23 Political Campaign Activities by Tax-Exempt Organizations 95 § 23.2 Prohibition on Charitable Organizations 95 (b) Participation or Intervention 95 § 23.3 Political Campaign Expenditures and Tax Sanctions 95 § 23.6 Political Activities of Social Welfare Organizations 96 (a) Allowable Campaign Activity 96 24 Unrelated Business: Basic Rules 97 § 24.1 Introduction to Unrelated Business Rules 97 § 24.2 Definition of Trade or Business 97 (j) Concept of Investment Plus 97 § 24.3 Definition of Regularly Carried On 97 (a) General Principles 97 (b) Determining Regularity 98 § 24.
4A Deemed Unrelated Business Income 98 § 24.5 Contemporary Applications of Unrelated Business Rules 98 (i) Fundraising 98 (q) Other Organizations'' Exempt Functions 98 § 24.9 Unrelated Debt-Financed Income 98 (c) Acquisition Indebtedness 98 (d) Exempt Function Borrowing 99 (e) Administrative Needs Borrowing 100 25 Unrelated Business: Modifications, Exceptions, Special Rules, and Taxation 101 § 25.1 Modifications 101 (g) Royalties 101 (h) Rent 102 (l-1) Income from Subsidiaries 102 (n-1) Global Intangible Low-Taxed Income 103 § 25.2 Exceptions 103 (a) Volunteer-Conducted Businesses 103 (b) Convenience Businesses 104 (c) Sales of Gift Items 104 (h) Gambling 105 (i) Low-Cost Articles 105 (l) Associate Member Dues 105 § 25.3 Special Rules 105 § 25.4 Fringe Benefit Rules 106 § 25.5 "Bucketing" Rule 106 (a) Statutory Law 106 (b) Final Regulations 106 (c) Medical Marijuana Dispensary Cases 110 § 25.
7 Deduction Rules 111 (a) General Rules 111 (b) Charitable Deduction 112 (c) Specific Deduction 112 (d) Net Operating Losses 112 Part Six: Acquisition and Maintenance of Tax Exemption 26 Exemption Recognition and Notice Processes 117 § 26.1 Recognition Application Procedure 117 (a) Introduction 117 (b) General Procedures 118.