Our final post of resources referenced in our session at the 2013 Alliance for Community Media National Conference, Nuts and Bolts of Nonprofits and Their People, with Syvia Strobel (ACM) and Deborah Vinsel(Thurston Community Television). Timely Nonprofit Issues Unrelated Business Activities: IRS Examination Area The underreporting of unrelated business taxable income...
UBIT / UNRELATED BUSINESS
IRS Report Focuses on Issues with Nonprofit Unrelated Business Income and Compensation
On April 25, 2013, the IRS released its Colleges and Universities Compliance Project Final Report (revised May 2, 2013), which stated the Service's plan to look at how nonprofits across the sector report unrelated business income (UBI) and use comparability data in setting compensation. The Report's Executive Summary concluded:...
Parent-Subsidiary Structures – Part II: Business Relationships
It is fairly common for a parent corporation to set up a subsidiary in part because it intends to enter into some business transactions with that subsidiary. For example, a 501(c)(3) nonprofit (referred to generally as a nonprofit in the rest of this post) and for-profit in a parent-subsidiary...
Earned Income 101 for Nonprofits – Webinar
Earlier today, Emily and I presented Earned Income 101 for Nonprofits for Nonprofit Webinars. You'll find our PowerPoint presentation on the site. I've reproduced the introduction here: Many nonprofits use earned income as a source of revenue generation. For example, it was estimated in 2008 that nearly 70% of the $1.4...
Nonprofit Radio: Earned Income & Unrelated Business Income Tax
This month on Tony Martignetti Nonprofit Radio, Emily and I discussed with Tony the topics of earned income and the unrelated business income tax. You can listen to a recorded version here or check it out (in a few days) on ITunes. Frequently Asked Questions Note: To provide a more easily understandable overview,...
The Profitable Side of Nonprofits – Part II: Different Legal Structures
What begins as a revenue generating idea for a nonprofit can sometimes develop into a larger endeavor, possibly requiring consideration of a subsidiary to house the planned activities. Many times, these are activities that mix social and business purposes, and the programs or entities that operate them are often...
The Profitable Side of Nonprofits – Part I: Earned Income
Recently, there has been much discussion about how business can take on a nonprofit flavor through social enterprise and new hybrid legal structures. Here, we would like to take a look at the profitable side of nonprofits in Part I and its relation to different legal structures in Part...
IRS Interim Report on Nonprofit Colleges and Universities Compliance Project
The Internal Revenue Service released an interim report (the "Report") on May 7, 2010, summarizing responses to compliance questionnaires sent to 400 public and private colleges and universities in October 2008. The Report and underlying project principally focused on (1) the conduct and reporting of exempt or other activities...
Management Service Organizations and Unrelated Business Income Tax
Nonprofit organizations are often seeking better, cost-effective ways to handle administrative services, for example, by using a management service organization (MSO). An MSO can be generally defined as an organization that primarily exists to provide administrative services to multiple organizations. An MSO will generally charge fees for providing such...
UBIT: Scientific Purposes and Scientific Research
In the context of scientific organizations, the IRS states that unrelated business income tax (UBIT) issues generally occur in two situations: (1) a scientific research organization (SRO) engaging in various projects or (2) a tax-exempt non-SRO engaging in research. “Scientific purpose” and “scientific research” are commonly seen phrases in...