Exempt Organizations Determinations 2009 Unit la Learning Objectives and Class Hours

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1 LESSO N Exempt Determinations 2009 Unit la Learning Objectives and Class Hours LESSON LE ARNING OBJECTIVES TITLE «Identify the IRS Mission and Balanced Measures to Exempt «> Describe how TE/GE fits into the IRS structure (, > Identify the types of tax exempt organizations and general nature of EO) > Describe how an application is processed > Describe the steps in making a determination > Describe the computer applications used by EO Determinations «> Describe how tax law applies to EO Determinations to EO Tax i * Identify the three basic types of authoritative documents Law, > Recognize available Service publications and resources Exempt Explain how information is organized in the IRM Organization Describe how to search the IRM for specific information Tax Research, > List the types of information that can be found on individual EO/BMF Tools accounts Identify internet research resources» Describe the types of information contained in the NERD Drive Disclosure, «> Define disclosure UNAX, and, > Determine when Service employees can disclose taxpayer information Public, Define UNAX Inspection, > Distinguish the difference between disclosure and UNAX > Identify the public inspection requirements > Recognize misconduct which may result in termination under the Restructuring and Reform Act of 1998 > Determine who may represent a taxpayer and in what capacity» Determine whether a Power of Attorney (POA)/Taxpayer Information Authorization (TIA) is complete and valid > Process a POA/TIA > Initiate action to add a POA/TIA to the CAF system on IDRS Types of «Describe the types of cases received by EO Determinations Cases, i» Explain how cases are graded Expedites,,» Identify which types of applications qualify for expedited processing User Fees,» Describe the criteria used when reviewing expedite requests» Explain the authority for user fee payments» Determine the proper user fee payments CLASS HOURS 1 hrs 2 hrs 2 hrs. 2 hrs

2 6 to Applications Identify the parts of Form 1023 and the information contained in each part Name the schedules that supplement Form 1023 Describe how cases are screened Document actions on a case Identify the work papers required in a case. 7 to Case Development and Documentatio n Identify items needing development Explain general guidelines to consider when working a case Identify the letters used to request additional information Describe proper questioning techniques Explain how to document actions on a case Explain how case files are assembled 8 to IRC Section 501(c)(3)and the Organizational Test Identify the types of entities that may qualify for exemption Determine whether an organizing document meets form requirements Describe the purposes specified in IRC section 501(c)(3) Determine whether an organizing document meets language requirements Explain how to correct deficiencies in the organizing document Identify the effective date of exemption based on the organizing document 9 IRC Section 501(c)(3) Operational Test Explain the requirements to satisfy the operational test Discuss the concept of "operating exclusively" List the exempt purposes specified in the statute Explain how an organization may carry on a trade or business and still be exempt Define inurement Identify which types of exempt organizations have inurement as a potential issue Identify potential inurement on Form 1023 applications Resolve inurement issues Define private benefit Distinguish between inurement and private benefit Identify private benefit on Form 1023 applications 10A IRC Section 501(c)(3)- Charitable Purposes and Types List the criteria used to determine whether an organization is a church Identify church related organizations Name other types of religious organizations that may qualify for exemption Determine whether religious publishing and broadcasting qualify for exemption Describe IRC section 7611 limitations on the scope of church examinations.

3 10B Other Activities Considered Charitable Support public works and recreation Support improvement to the environment and conservation Lessen the burdens of government Combat community deterioration and urban decay Eliminate prejudice and discrimination Support charitable purposes indirectly Further charitable purposes in foreign countries 11 Religious and Churches Identify churches, church-related organizations, and religious organizations Identify IRC section 7611 limitations on the scope of examinations List the criteria used to determine whether an organization is a church Identify church related organizations Recognize other types of religious organizations that may qualify for exemption Determine whether religious publishing and broadcasting qualify for exemption Describe IRC section 7611 limitations on the scope of church examinations 12 A Educational Define "education" per Treas. Reg (c)(3)-l(d)(3) Identify that qualify as "educational" per IRC section 501(c)(3) Distinguish between exclusively educational and that qualify for exemption under other IRC subsections 12B Community Education Programs Distinguish between educational and commercial Discuss the four publishing criteria identified in Rev. Rul Recognize typical financial literacy programs and Recognize community programs and that qualify as educational under IRC section 501(c)(3) 4 hrs 12C Schools and Scholarships Identify school criteria provided under IRC section 170(b)(l)(A)(ii) Identify when an organization qualifies for prospective exemption as a school Determine whether organizations meet the school requirements set forth in Rev Proc Determine whether schools are required to annually file Form 990 Identify when child care organizations qualify as schools Determine when vocational schools and student operated businesses conduct qualifying educational Identify when scholarship/grant programs qualify as charitable

4 13A Public Charities, Private s, private Operating s Determine which organizations should be classified under IRC section 170(b)(l)(A)(vi) Compute the public support test for an organization that has been in existence for at least five years and is being granted relief from the timely filing requirement 13B 509(a)(1) Determine when an organization is described in IRC section 509(a)(2) Compute the support tests under IRC section 509(a)(2) 13C 509(a)(2) Describe the three types of supporting organizations Recognize organizations incorrectly requesting classification under IRC section 509(a)(3) 6 hrs 13D 509(a)(3) Identify "political " and "legislative (lobbying) " and differentiate between the two Determine when an activity is educational rather than political Explain how much political and legislative activity is permissible for IRC section 501(c)(3) organizations and other exempt organizations Determine whether an organization is substantially engaged in legislative Identify the consequences of excessive legislative Define an "action organization" and explain why an action organization does not qualify for exemption under IRC section 501(c)(3) Explain the provisions of IRC sections 4911 and 501(h) including the excise taxes that may be imposed on an IRC section 501(c)(3) organization Describe the effect of that are illegal or contrary to public policy on tax exempt status 14 Political Legislative, and Prohibited Activities Identify "political " and "legislative (lobbying) " and differentiate between the two Determine when an activity is educational rather than political Explain how much political and legislative activity is permissible for IRC section 501(c)(3) organizations and other exempt organizations Determine whether an organization is substantially engaged in legislative Identify the consequences of excessive legislative Define an "action organization" and explain why an action organization does not qualify for exemption under IRC section 501(c)(3) Explain the provisions of IRC sections 4911 and 501(h) including the excise taxes that may be imposed on an IRC section 501(c)(3) organization Describe the effect of that are illegal or contrary to public policy on tax exempt status

5 15 Fundraising Explain the "commensurate test" and determine when it is met Define a "feeder organization" Identify the exemption issues associated with feeder organizations Recognize the exemption issues associated with professional fundraising State what actions should be taken if assigned a case involving a professional fundraiser Recognize the exemption issues associated with gaming, including bingo State what actions should be taken if assigned a case involving gaming Name and explain exemption issues associated with internet fundraising List and explain exemption issues associated with car, truck, and boat donations 16 toubi Describe the effect unrelated business may have on an exempt organization Identify that are related or unrelated to an organization's exempt purpose Recognize terms used in determining unrelated 17 Case Closing Identify common case closing forms. Use the correct procedures for the more common types of closings. o Suspense o Withdrawal o Transfer to EO Technical o Correction Disposal o Proposed Adverse Complete Form Identify and prepare the correct determination letter. Complete closing documentation. 18 Case Review Identify TEQMS standards and elements. Identify which cases are sent to mandatory review. Identify which cases are sent to EO Technical for post review.

(c)(3) Applying for 501(c)(3) Tax-Exempt Status,

(c)(3) Applying for 501(c)(3) Tax-Exempt Status, Tax Exempt and Government Entities EXEMPT ORGANIZATIONS Applying for 501(c)(3) Tax-Exempt Status, Inside: Why apply for 501(c)(3) status? Who is eligible for 501(c)(3) status? What responsibilities accompany