Tax Exempt Organizations

Question 1

What are filing requirements for exempt organizations?

Answer 1

• EO must file an information return (Form 990) if gross receipts exceed $50,000
• Churches do not have to file Form 990
• Form 990 must be filed before 15th day of fifth month after close of tax year with automatic 3 month extension available
• Most EOs that are not required to file an information return must file an electronic notice (990-N) with IRS
• Churches, state institutions, and governmental units exempt from electronic notice requirements

Question 2

What are private foundations?

Answer 2

-Tax exempt organizations that receive less than one third of their annual support from their members and the general public

Question 3

What are requirements to qualify as an EO?

Answer 3

• Must operate exclusively for a tax exempt purpose

- Influencing legislation or political parties not an acceptable purpose (Section 501(c)(3) organizations an exception)

Question 4

What are EOs taxed on?

Answer 4

-Unrelated business income

Question 5

What are requirements for Unrelated Business Income (UBI)?

Answer 5

• Must be from a business regularly carried on

- Must be unrelated to tax exempt purpose

Question 6

What are examples of related business income that aren’t taxed?

Answer 6

• Sale of merchandise received as contributions
• In general investment income
• Rents received from real property

*Income from advertising in journals of EO is UBI