Introducing Tax-Exempt Organizations - What's the Purpose of it All

Overview

The three most important principles to remember about tax-exempt organizations are: Purpose, Purpose, and Purpose. An organization desiring to be exempt from regular income taxation must have a tax-exempt purpose that corresponds with those listed in the Internal Revenue Code; it must demonstrate its tax-exempt purpose in the operation of the organization, starting in year one, then continuing throughout its existence. The actions of the organizers, directors, and officers of the organization must be consistent with the overall purpose for which the organization received its exemption, as well. This introduction to tax-exempt organizations identifies circumstances under which an organization may and may not be granted exemption. It describes the process for requesting tax-exempt status, then it introduces basic concepts on which to build an organization that will be allowed to remain tax-exempt.

Prerequisites

None

Designed For

Accounting and financial professionals that have any involvement with tax-exempt organizations and preparation of Forms 1023, 1023-EZ, 1024, 990, 990-EZ, and 990-N. May also be suitable for public practice.

Objectives

• Identify organizations eligible for tax-exempt status • Understand the steps necessary for applying for exemption • Be aware of traps and pitfalls that can lead to penalties or loss of exempt status Identify issues involved in preparing Forms 1023, 1023-EZ, or 1024 and related schedules

Preparation

None