NONPROFIT
ENTERPRISES:
Law and Taxation
1999-1 CUMULATIVE SUPPLEMENT
(Published May 1999)
By
MARILYN E. PHELAN
Professor of Law
Texas Tech University School of Law
VOLUME 1
Cite as: Phelan Nonprofit Eriterprises § -
Customer Service: 1-800-328-4880
FAX: 1-800-340-9378
Pub 5/99
Supplement Table of Contents
Volume
1
CHAPTER
1
NATURE OF NONPROFIT ENTERPRISES
§ 1:03.
§ 1:04.
§ 1:11.
§ 1:14.
§ 1:15.
§ 1:16.
§ 1:18.
§ 1:22.
§ 1:36.
§ 1:39.
§ 1:41.
§ 1:46.
§ 1:57.
Alternatives to Incorporation.
-Charitable Trust.
Summary of State Acts.
-Arizona Nonprofit Corporation Act.
-Arkansas Nonprofit Corporation Act.
-California Nonprofit Corporation Acts.
-Connecticut Nonstock Corporation Act.
-Georgia Nonprofit Corporation Code.
-Mississippi Nonprofit Corporation Act.
-Nebraska Nonprofit Corporation Act.
-New Hampshire Corporations Act.
-North Dakota Nonprofit Corporation Act.
- Vermont Nonprofit' Corporation Act.
CHAPTER 2
CREATION OF A NONPROFIT
CORPORATION
§ 2:25.
§ 2:27.
Licenses and Permits.
Obtaining Tax-Exempt Status.
v
NONPROFIT ENTERPRISES
CHAPTER 4
LIABILITY OF MEMBERS AND
DIRECTORS
§4:02.
§ 4:10.
§ 4:12.40.
Legal Standards Determining Liability of Directors.
Statutory Law Relating to Liability of Directors.
-Immunity from Liability.
CHAPTER 5
OFFICERS AND EMPLOYEES
§5:07.
§ 5:08.
§ 5:10.
§ 5:10.10.
§ 5:13.
§ 5:14.
§ 5:15.
§ 5:17.
§ 5:2l.
§ 5:22.
§ 5:23.
Employees.
Discrimination in Employment-Title VII.
-Age Discrimination in Employment Act.
Americans With Disabilities Act (ADA).
Retirement Plans for Employees of Nonprofit Enterprises.
-Qualified Plans.
- - Participation and Vesting Requirements.
-Integration With Social Security.
- -Taxation of Benefits.
-Individual Retirement Accounts.
-Simplified Employee Pension.
CHAPTER 6
ACCOUNTING FOR NONPROFIT
ENTERPRISES
§ 6:01.
Reporting Practices of Nonprofit Enterprises.
CUMULATIVE SUPPLEMENT
§ 7:01.50.
§ 7:02 .
§ 7:03 .
§ 7:04.
§ 7:13.
§ 7:14.
§ 7:14.50.
§ 7:16.
§ 7:17.
§ 7:20.
§ 7:21 .
§ 7:22.
§ 7:23.
§ 7:25.
§ 7:29.
§ 7:31.
§ 7:33 .
§ 7:34.
§ 7:37.
CHAPTER 8
CHARITABLE ORGANIZATIONS AND THE
CHARITABLE CONTRIBUTION
DEDUCTION
§ 8:01.
§ 8:04.
§ 8:06.
§ 8:10.
§ 8:16.
§ 8:17.
CHAPTER 7
FEDERAL TAX-EXEMPT STATUS
§ 7:01.
Tax-Exempt Status--In General.
VI
- Public Inspection of Annual Returns . [New]
-Application for Tax-Exempt Status .
-Group Exemption Letter.
Charitable Organizations.
Other Tax-Exempt Organizations.
-Social Welfare Organizations.
-Penalty Tax on "Excess Benefit Transactions." [New]
-Labor, Agricultural and Horticultural Organizations.
- Business Leagues and Development Corporations .
- Fraternal Societies.
- Voluntary Employees' Beneficiary Associations.
- Benevolent Life Insurance Associations, Mutual Irrigation and Cooperative Telephone Companies.
-Cemetery Companies.
- War Veterans' Organizations.
-Political Organizations.
- Homeowner's Associations.
-Cooperative Service Organizations.
-Other Nonprofit Organizations.
Loss of Exempt Status.
§ 8:18.
§ 8:19.
§ 8:20.
§ 8:22.
Charitable Organizations-In General.
-Operational Test.
- Educational Purpose.
Charitable Contributions Deduction.
- Gifts of Less Than an Entire Interest.
- - Remainder Interest in Farm of Personal Residence of
Gifts for Conservational Purposes .
- -Charitable Lead Trust.
- - Pooled Income Fund.
- - -Form of Declaration for Pooled Income Fund.
--Charitable Remainder Trusts: Annuity Trusts and
Unitrusts.
vii
NONPROFIT ENTERPRISES
CUMULATIVE SUPPLEMENT
CHAPTER 9
CHAPTER 11
PUBLIC CHARITIES
UNRELATED BUSINESS TAXABLE
INCOME
§ 9:01.50.
§9:02.
§ 9:03.
§9:05.
§ 9:12.
§ 9:32 .
Penalty Tax on "Excess Benefit Transactions." [New]
Section 509(a)(1) Organizations.
-Churches.
- Hospitals and Medical Research Organizations.
Exclusion for Unusual Grants.
Annual Returns.
CHAPTER 10
PRIVATE FOUNDATIONS
§ 10:04.
§ 10:05 .
§ 10:06.
§ 10:07.
§ 10:08.
§ 10:09.
§ 10:10.
§ 10:11.
§ 10:12.
§ 10:14.
§ 10:15.
§ 10:16.
§ 10:17.
§ 10:18.
§ 10:19.
§ 10:20.
§ 10:21.
§ 10:22.
§ 10:23.
§ 10:29.
§ 10:31.
§ 10:35.
§ 10:40.
Self-Dealing.
-Correction of Self-Dealing.
-Specific Acts of Self-Dealing.
-Exceptions to Self-Dealing.
Failure To Distribute Income.
-Minimum Investment Return.
-Qualifying Distributions.
- Timing of Qualifying Distributions.
Excess Business Holdings.
Investments Which Jeopardize Charitable Purposes.
Taxable Expenditures.
- Payments To Influence Legislation or an Election.
-Grants to Individuals.
-Grants to Organizations.
-Grants to Public Charities and Governmental Agencies.
-Grants to Employees.
- Expenditures for N oncharitable Purposes.
Private Operating Foundations.
- Qualifying Distributions for Operating Foundations.
Nonexempt Trusts.
-Split-Interest Trusts.
Termination of Private Foundation Status.
- Transferee Foundation.
viii
§ 11:01.
§ 11:02.
§ 11:04.
§ 11:05.
§ 11:06.
§ 11:08.
§ 11:09.
§ 11:10.
§ 11:11.
§ 11:12.
§ 11:13.
§ 11:14.
§ 11:15.
§ 11:17.
§ 11:18.
§ 11:19.
§ 11:20.
§ 11:22.
§ 11:25.
In General.
Income from Unrelated Trade or Business.
-Not Substantially Related to Organization's Exempt
Purpose.
-Specific Exclusions from Unrelated Trade.
-Income from Advertising.
-Income from Bingo Games and Games of Chance.
- Unrelated Trade or Business of a Hospital.
- Unrelated Trade or Business of a College or University.
- Income from Museum Shops.
-Income from Sale of Books and Other Publications.
Income from Investments.
- Rental Income.
-Royalty Income.
Income from Controlled Organizations.
Income from Unrelated Debt-Financed Property.
- Unrelated Debt-Financed Property.
-Average Acquisition Indebtedness.
Unrelated Business Taxable Income of Social Clubs and
Employees' Associations.
-Sales of Property by Social Clubs and Employees'
Association.
CHAPTER llA
SPECIALIZED TAX PROBLEMS OF
NONPROFIT ORGANIZATIONS
§ llA:01.
§ 11A:02.
§ 11A:02.50.
§ 11A:03.
§ 11A:04.
§ 11A:05.
§ 11A:06.
§ 11A:07.
Loss of Tax-Exempt Status.
-Inurement.
Executive Compensation.
- Feeder Organization.
--Commercial Activities of Nonprofit Organizations.
- - Involvement in Partnership.
- -Shareholder in For-Profit Corporation.
-Public Policy Limitation.
ix
NONPROFIT ENTERPRISES
§
§
§
§
§
§
§
§
llA:08.50.
llA:09.
llA:10.
llA:12.
llA:13.
llA:17.
llA:18.
llA:19.
- -Lobbying Disclosure Act. [New]
--Section 501(c)(3) Organizations.
--Other Nonprofit Organizations.
Grass Roots Lobbying.
-Communications With Members.
- - Political Campaigns.
- - Penalty Taxes.
Tax-Exempt Bond Financing for § 501(c)(3) Organizations.
CHAPTER
CUMULATIVE SUPPLEMENT
CHAPTER
13
MERGER, CONSOLIDATION, AND
DISSOLUTION
§ 13:02.
§ 13:10.
Effect of Merger or Consolidation.
Distribution of Assets.
lIB
FUND RAISING
§ llB:02.
§ llB:05.
§ llB:08.
Charitable Contribution Deduction for Donors.
Disclosure Requirements.
-Membership Dues Solicitation.
CHAPTER
12
LEGAL PROBLEMS OF NONPROFIT
ENTERPRISES
§ 12:02.
§ 12:05.
§ 12:05.40.
§ 12:06.
§ 12:07.
§ 12:08.
§ 12:10.
§ 12:11.
§
§
§
§
12:12.
12:13.
12:17.
12:25.
Right of Association.
-Standing of Association To Seek Judicial Relief.
-Standing To Challenge Actions of Nonprofit Enterprises.
Tort Liability of Nonprofit Enterprises.
- Charitable Immunity.
Application of Copyright Act to Nonprofit Enterprises.
- Copyright Protection.
-Public Performances of Copyright Music by Nonprofit
Enterprises.
-Fair Use of Copyrighted Works.
Securities Laws.
Application of Antitrust Laws to Nonprofit Enterprises.
- Right To Work Laws.
x
Xl
Table of New or Changed Section
Titles
This table is furnished to provide a listing of section titles which
have been added or changed since the publication of the original
volume. To be certain you have not overlooked any sections, always
consult this table.
§ 7:01.50.
§ 7:14.50.
§ 9:01.50.
§ 11A:08.50.
- Public Inspection of Annual Returns.
- Penalty Tax on "Excess Benefit Transactions."
Penalty Tax on "Excess Benefit Transactions."
- - Lobbying Disclosure Act.
xiii