The Law of Tax–Exempt Organizations

The definitive legal guide for tax–exempt organizations

Tax–exempt organizations are subject to a complex set of statutes, regulations, and case law that are as diverse as the organizations that are covered. Lawyers, managers, accountants, directors, officers, and executives for nonprofit organizations are subject to special rules that govern practices such as how an organization must be organized, methods of measuring unrelated business income, and much more. To keep abreast of the ever–changing tax laws, you need a reliable reference that is written in plain English. The Law of Tax–Exempt Organizations, Eleventh Edition and the companion website offers a clear understanding of the evolving statutes, regulations, and court decisions in order to help you make informed decisions.

Organized to be easily accessible, The Law of Tax–Exempt Organizations is written by Bruce R. Hopkins, one of the country′s leading legal authorities on the topic. No matter what your professional experience new to the field or a well–established practitioner this vital resource contains information on targeted aspects of tax laws and regulations as well as a quick refresher course on recent changes to the laws related to tax–exempt organizations.

With detailed documentation and citations on Internal Revenue Code citations, references to regulations, IRS rulings, court opinions, tax law literature, current articles, tax law review notes, tables of cases, and tables of IRS rulings, this publication is supplemented annually with significant updates on the latest developments in:

Nonprofit governance Legislative and political activity New rules for donor–advised funds New rules for supporting organizations Expanded discussion of private benefit doctrine (to reflect recent IRS ruling activity) Updates on unrelated business activities Use of subsidiaries and joint ventures

Comprehensive, reliable, and accessible, this essential guide is the resource you will turn to time and again for the dependable advice you need to understand complicated tax law issues.

For more information on this and all of Bruce Hopkins′s nonprofit law publications, visit wiley.com/go/Hopkins

About the Author xxvii

Preface xxix

About the Online Resources xxxiii

Book Citations xxxv

PART ONE: INTRODUCTION TO THE LAW OF TAX–EXEMPT ORGANIZATIONS

1 Definition of and Rationales for Tax–Exempt Organizations 3

2 Overview of Nonprofit Sector and Tax–Exempt Organizations 23

PART TWO: FUNDAMENTALS OF THE LAW OF TAX–EXEMPT ORGANIZATIONS

3 Source, Advantages, and Disadvantages of Tax Exemption 43

4 Organizational, Operational, and Related Tests and Doctrines 61

5 Nonprofit Governance 133

PART THREE: TAX–EXEMPT CHARITABLE ORGANIZATIONS

6 Concept of Charitable 159

7 Charitable Organizations 191

8 Educational Organizations 263

9 Scientific Organizations 287

10 Religious Organizations 295

11 Other Charitable Organizations 329

12 Public Charities and Private Foundations 343

PART FOUR: OTHER TAX–EXEMPT ORGANIZATIONS

13 Social Welfare Organizations 385

14 Business Leagues and Like Organizations 401

15 Social Clubs 429

16 Labor, Agricultural, and Horticultural Organizations 445

17 Political Organizations 455

18 Employee Benefit Funds 469

19 Other Categories of Tax–Exempt Organizations 491

PART FIVE: PRINCIPAL EXEMPT ORGANIZATION LAWS

20 Private Inurement and Private Benefit 547

21 Intermediate Sanctions 595

22 Legislative Activities by Tax–Exempt Organizations 625

23 Political Campaign Activities by Tax–Exempt Organizations 657

24 Unrelated Business: Basic Rules 685

25 Unrelated Business: Modifications, Exceptions, and Special Rules 767

PART SIX: ACQUISITION AND MAINTENANCE OF TAX EXEMPTION

26 Exemption Recognition and Notice Processes 795

27 Administrative and Litigation Procedures 835

28 Operational Requirements 877

PART SEVEN: INTERORGANIZATIONAL STRUCTURES AND OPERATIONAL FORMS

29 Tax–Exempt Organizations and Exempt Subsidiaries 949

30 Tax–Exempt Organizations and For–Profit Subsidiaries 965

31 Tax–Exempt Organizations and Joint Ventures 987

32 Tax–Exempt Organizations: Other Operations and Restructuring 1017

PART EIGHT: APPENDIXES

Index 1085

BRUCE R. HOPKINS is the principal with the Bruce R. Hopkins Law Firm, LLC. He is the Professor from Practice at the University of Kansas School of Law. He is also the author and coauthor of over 30 books, all published by Wiley, including Bruce R. Hopkins Nonprofit Law Dictionary and The Tax Law of Charitable Giving, Fifth Edition. Hopkins earned his juris doctorate and master of laws degrees at the George Washington University. He has practiced law for over forty–five years and is a member of the District of Columbia and Missouri bars. He received the 2007 Outstanding Nonprofit Lawyer Award (Vanguard Lifetime Achievement Award) from the American Bar Association, Section of Business Law, Committee on Nonprofit Corporations. He is listed in The Best Lawyers in America, Nonprofit Organizations/Charities Law, 2007 2015.