As a result, the tax-exempt organization
may need to reasonably approximate UBTI by state.
In many jurisdictions, a limited liability company (but only those treated as a corporation for federal tax purposes), a trust, or a trust created by will can create a tax-exempt organization
Small businesses and tax-exempt organizations
that provide healthcare coverage are eligible for the credit if they meet the following conditions:
The organizations that must fill out Form 8922 will include a wide variety of tax-exempt organizations
, such as religious, charitable, scientific and literary groups.
However, regardless of the type, joint ventures between tax-exempt organizations
and for-profit entities are highly scrutinized by the IRS because of the concern that such ventures will not contribute to one or more of the exempt organization's purposes.
The Internal Revenue Service (IRS) last week issued a notice of proposed rulemaking pertaining to the public disclosure requirements of some municipalities and state municipal leagues, as well as other tax-exempt organizations
The IRS, in Private Letter Rating 9043039, issued July 30, 1990, appears to have wavered on this position by concluding that the Subpart F income inclusion of a tax-exempt entity resulting from its ownership of a foreign captive insurance company must be characterized by the income that makes up the inclusion, thereby treating the Subpart F income inclusion as if it had been earned directly by the tax-exempt organization
for UBT1 purposes.
The new Form 990 requirements generated a significant amount of discussion and debate among the IRS, tax-exempt organizations
and members of the client-serving community Accounting authorities such as the AICPA have increased their involvement in these discussions to try to address the concerns of taxpayers and their preparers.
The question remains whether all of the tax-exempt organizations
that have not filed are actually out of business.
Even though the emphasis of SOA is on investor protection, there has been speculation and discussion about the applicability of SOA to tax-exempt organizations
, including tax-exempt social clubs.
The issue was whether the Subpart F income generated by the captive constituted "unrelated business taxable income" which would be taxable to the tax-exempt organization
notwithstanding its exemption.
For a detailed discussion of the issues in this area, see "Small Tax-Exempt Organization
E-Postcard Requirements Finalized," by Sarah Lovinger, in the November 2009 issue of The Tax Adviser.