Tax-Exempt Organizations: Organizational Requirements (Portfolio 450)
Portfolio No. 450, Tax-Exempt Organizations: Organizational Requirements, describes the organization aspects of organizations exempt from federal income taxation under the IRC.
Bloomberg Tax Portfolio No. 451, Tax-Exempt Organizations: Operational Requirements, describes the operation of organizations exempt from federal income taxation under the Internal Revenue Code. Portfolio No. 450, Tax-Exempt Organizations: Organizational Requirements, describes the organization aspects of organizations exempt from federal income taxation under the Internal Revenue Code of 1986, as amended (the Code). Tax-Exempt Organizations are required to meet both the Organizational Test and the Operational Test in order to qualify for tax-exempt status. This Portfolio emphasizes the Organizational Test. There is much overlap in the Organizational Test and the Operational Test so readers should be careful to consult both this portfolio and its companion Tax Management Portfolio No. 451, Tax-Exempt Organizations: Operational Requirements. After generally discussing the different types of tax-exempt organizations, the Portfolio concentrates on §501(c)(3) organizations because these organizations dominate the tax-exempt community. It does not discuss private foundations except to distinguish public charities from private foundations and to mention certain reporting requirements of private foundations. This Portfolio also does not address employee benefit plans or other types of retirement plans. These aspects of tax-exempt organizations are discussed in other Portfolios.
This Portfolio analyzes the organizational requirements of tax-exempt organizations. It discusses organizations exempt under §§501(a) and 501(c)(1) through (29), §521 farmers’ cooperatives, §527 political organizations, §528 homeowners’ associations, and §529 qualified tuition plans. Governmental entities and instrumentalities also are discussed. Charitable trusts and pooled income funds are briefly mentioned. This Portfolio focuses on the various types of public charities and their activities, and distinguishes public charities from private foundations.
The reporting and record-keeping requirements of exempt organizations are discussed in 452 T.M., Tax-Exempt Organizations: Reporting, Disclosure and Other Procedural Aspects. Other issues relating to tax-exempt organizations discussed herein are covered in greater detail in other Portfolios, to which reference is made where appropriate.This Portfolio may be cited as Webster, 450 T.M., Tax-Exempt Organizations: Organizational Requirements.
Table of Contents
I. General Considerations — Introduction
II. Advantages to Tax Exemption
III. Disadvantages to Tax Exemption
IV. The Organizational and Operational Tests of §501(c)(3)
V. Types of Tax-Exempt Organizations
VI. Governmental Entities and Instrumentalities
VII. Charitable Organizations — §501(c)(3) Generally
VIII. Distinction Between Public Charities and Private Foundations
IX. Section 508 Notice Requirements
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