While exempt organizations
investing in passthrough entities may owe income tax under the UBTI rules, these organizations need to consider how their after-tax rate of return compares between their UBTI- and non-UBTI-generating investments.
Many provisions simply cannot be modified to apply to not-for-profit organizations, but certain provisions can be modified so as to strengthen the governance of exempt organizations
, including social clubs.
Individuals, as well as exempt organizations
, may now be penalized for engaging in private inurement transactions.
After Revenue Ruling 2004-24, the issue remained murky for exempt organizations
for two reasons.
Depending on the degree of involvement of the exempt organization
, there are four types of joint ventures that may come into play:
Marcus Owens, director of the exempt organizations
division, told tire publication that the plans are not finalized yet, but even if they go through he does not expect to see a dramatic increase in the number of non-profit organization that lose their tax-exempt status or receive "intermediate sanctions" -- penalties that fall short of revocation of exempt status.
Thus, it is critical to understand each state's rules and nuances in the area of exempt organizations
and the authority related to UBTI.
Tax exempt organizations
(EO) were generally not required to file the new form at the time they apply for tax exempt status, said Williams.
Managements of exempt organizations
have extended their fundraising efforts to sponsorship and affinity programs in order to obtain adequate resources to support exempt activities.
Titled "Urgent Memorandum For Churches Concerning Distribution of `Voter Guides' In 1998 Congressional Elections," the document was drafted by Milton Cerny, formerly chief of the Exempt Organizations
Ruling Area at the IRS, and Albert G.