EA Part 2-Passkey 18 Exempt

Question 1

501(c)(3) allowed exempt organizations:

Answer 1

charitable, educational, religious
scientific, literary,
preventing cruelty to children or animals
testing for public safety
fostering national or international sports competition

Question 2

To request exempt status under 501(c)(3), must have organizing document and file Form __

Answer 2

Form 1023 Application for Recognition of Exemption. Organizations that do not qualify to receive tax deductible donations use Form 1024 (civic, social welfare, labor unions, rec clubs, etc.)

Question 3

Small organization not required to file Form 1023 unless its annual gross receipts are > $__

Answer 3

$5,000. Must file within 90 days of end of year it exceeds this threshold.

Question 4

Generally must request exemption from IRS by the end of the __ month after it was created, with a __-month extension available.

Answer 4

15th month

12-month extension

Question 5

A private foundation is always __

Answer 5

required to request exemption by filing Form 1023 or 1024, regardless of its gross receipts, and file 990-PF every year

Question 6

Every exempt org. must file annual information return on Form __

Answer 6

Form 990, Return of Organization Exempt from Income Tax.
But these are exempt from filing:
*churches & affiliated organizations
*government agencies

Question 7

Small tax-exempt org. with gross receipts of $__ or less are required to ELECTRONICALLY file Form __

Answer 7

$50,000 or less
Form 990-N Electronic Notice for Tax Exempt Org. Not Required to File Form 990.
Also called an “e-postcard” because electronic & short.

Question 8

An exempt entity may request a __-month extension to file 990 by filing Form ___

Answer 8

3-month
Form 8868, Application for Extension of Time to File an Exempt Org. Return.
Can request additional 3-month if needed, and then must explain why and sign it.

Question 9

An org. must file Form 990 electronically if it files at least __ returns and has total assets of ___

Answer 9

250 returns

$10 million or more at end of tax year.

Question 10

Failure to file penalty (which also apply if incorrect info on return) for exempt org.:

Answer 10

$20/day, with max. penalty the smaller of
$10,000 or 5% of org. gross receipts.
Large org. with >$1 million gross receipts:
$100/day, up to max. of $50,000.

Question 11

Generally, a public charity has a broad base of support while a private foundation ahs very limited sources. Private foundation is a charitable org. that is set up as __

Answer 11

a holding entity for donated assets, and receives less preferential tax treatment than charities. Deductibility of contributions to PF is more limited.

Question 12

All private foundations must file Form __ every year regardless of their income.

Answer 12

Form 990-PF Return of Private Foundation

Question 13

There is an excise tax on the net investment income of domestic PFs, and certain foreign PF’s. It is reported on __

Answer 13

Form 990-PF and must be paid annually or in quarterly est. tax payments if total tax is $500 or more.

Question 14

Entity not considered PF if it receives more than __ of its annual support from its own members and/or the general public.

Answer 14

1/3

Question 14

Unrelated business income tax (UBIT) for exempt org. if:

• trade or business
• regularly carried on and
• not substantially related to furthering the exempt purpose of org.

Answer 14

If exempt org. has $1,000 or > gross income from unrelated business, must file Form 990-T by the 15th day of the 5th month after tax year ends.