SECTION 5201 EXEMPTS HOUSES OF WORSHIP FROM THE JOHNSON AMENDMENT
Section 5201 allows houses of worship to endorse candidates so long the endorsement is made during a religious service or gathering, is made in the ordinary course of their tax-exempt purpose, and does not incur more than a de minimis incremental expense. This would, in effect, exempt houses of worship from the Johnson Amendment. Read more
Even though non-profit organizations can be tax-exempt, they are still required to file a return with the IRS. Many individuals, including those associated with non-profit organizations, do not understand the tax obligations of a non-profit organization.
I have compiled a top ten list of mistakes made in regard to taxes for these organizations.
• Not understanding the difference in non-profit and tax-exempt. An organization is a non-profit when it registers with the state as a non-profit organization. This state registration does not confer on it tax-exempt status. The organization must file a Form 1023 with the IRS to apply for, and receive tax-exempt status.
• Not filing a return. Because the organization is tax-exempt, some have a belief that the organization is not required to file a tax return. All tax exempt organizations, with the exception of churches, must file a Form 990 annually with the IRS. Read more
When a church or religious organization loses its tax-exempt status, the obvious consequences are that donations to the organizations can no longer be deducted by donors. In addition, loss of tax-exempt status means that the organization is subject to federal and state income taxes on its net income. That last statement is not quite as bad as it sounds, though because the tax is on net income, not the gross. Most such organizations tend to spend most, if not all, of their income on programs and infrastructure. Therefore, there would be little or no net income and no income tax to pay.
There are numerous other consequences involved with losing one’s tax-exempt status that can affect the organization significantly. Read more
Many people, particularly those involved in 501(c)(3) tax-exempt charitable organizations, are familiar with the process of applying to the IRS in order to receive tax-exempt status. Organizations that have obtained this status can accept tax-deductible contributions from donors. Obviously, this is critical to such organizations.
Tax-exempt status should not be taken for granted. When obtained, it is for an indefinite period. However, an organization can lose its tax exempt status, either by voluntarily surrendering it or having it revoked by the IRS. If revoked by the IRS, it may be retroactive if the church or organization omitted or misstated material facts or operated in a manner significantly different than originally represented. More frequently, however, the revocation will be effective no earlier than the date on which the organization received written notice Read more
With all the distractions of deflated footballs, player misconduct and the safety of the game, the NFL is volunteering to give up its tax-exempt status.
The National Football League (“NFL”) which you figure makes millions in revenue every year is recognized by the IRS as a tax-exempt entity and does not pay income taxes as any for-profit-company would.
Section 501(c)(6) of the Internal Revenue Code provides for the exemption from tax entities which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual. Read more
If an organization receives non-profit status from the state upon its organization, it must take another step if it wishes to have the ability to accept tax-deductible contributions from potential donors. It must apply to the Internal Revenue Service for tax-exempt status. Many are unaware that non-profit and tax-exempt are not interchangeable terms.
When an organization that will operate as a non-profit corporation is initially formed, it applies to the state for a corporate charter as a non-profit corporation. This assures that any excess revenues received over expenses incurred will not be taxable income to the organization or its owners. This status does not confer on the organization the right or ability to accept tax-deductible contributions from outsiders. Read more
Congressional Record – Tax Cuts And Jobs Act (Part 15)
IRC Section 965 Transition Tax: Resistance Is Futile
Renouncing/Relinquishing Your U.S. Citizenship And Taxes
Rethinking Entity Choice In Light of Tax Cuts And Jobs Act
Congressional Record – Tax Cuts And Jobs Act (Part 14)
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