Forming and Operating a Nonprofit: A Comprehensive Guide to Tax Exempt Status

121 questions on forming and operating a nonprofit, answered and cited by the UpLaw editorial team.

• Are nonprofit directors personally liable?
• Can a 501(c)(3) charity lobby at all?
• Can a purpose clause be too specific?
• Can a vendor become an insider for inurement purposes?
• Can employees volunteer for their own nonprofit employer?
• Did the IRS change its position on the Johnson Amendment for churches?
• Does a "Donate" button on a website mean I must register everywhere?
• Does a federal determination letter get me state tax exemption too?
• Does employment law apply to nonprofits?
• Does it matter that a charity uses all the profits for its mission?
• Do I have to register before soliciting charitable contributions?
• How are donor-advised funds regulated?
• How are unpaid interns treated at a nonprofit?
• How does an affiliated (c)(3)/(c)(4) pair work?
• How does an automatic excess benefit play out in practice?
• How does a used-bookstore run by a charity get taxed?
• How does private benefit differ from inurement?
• How does § 514 tax debt-financed income?
• How does the IRS decide whether advocacy is "educational"?
• How does the rebuttable presumption of reasonableness work?
• How does the § 170(b)(1)(A)(vi) public support test work?
• How does the § 509(a)(2) public support test work?
• How does the tax law treat churches differently from other religious organizations?
• How do payroll taxes work differently for a 501(c)(3)?
• How is a brand-new charity classified when it has no support history?
• How is a conflicting interest transaction approved?
• How public is nonprofit executive compensation?
• Is "charitable" limited to helping the poor?
• Is every 501(c)(3) presumed to be a private foundation?
• Is every tax-exempt organization one you can deduct contributions to?
• Is the ban on political campaign intervention absolute?
• Is there a percentage that defines "insubstantial"?
• Should a charity be a corporation, a trust, or an LLC?
• Should a nonprofit have members?
• Should I incorporate a charity in Delaware?
• Should my charity make the § 501(h) election?
• Should my organization be a 501(c)(3) or a 501(c)(4)?
• What acknowledgment must a charity give a donor?
• What activities are not lobbying at all under § 501(h)?
• What are excess business holdings under § 4943?
• What are Form 8283 and Form 8282?
• What are jeopardizing investments and program-related investments?
• What are the core propositions of nonprofit law in one place?
• What are the donor-advised fund and supporting organization automatic excess benefit rules?
• What are the eight exempt purposes under § 501(c)(3)?
• What are the four routes out of private foundation status?
• What are the proximity factors for issue advocacy near an election?
• What are the three elements of unrelated business income?
• What can I do about a gift that will tip my charity?
• What constitutional limits apply to state regulation of charitable fundraising?
• What counts as prohibited campaign intervention?
• What did American Campaign Academy hold about private benefit?
• What did American College of Physicians hold about journal advertising?
• What did Americans for Prosperity Foundation v. Bonta decide?
• What did Bob Jones University hold about public policy and exemption?
• What did Branch Ministries decide?
• What did the Sibley Hospital case establish?
• What does "lessening the burdens of government" require?
• What does "reasonable compensation" mean for a nonprofit executive?
• What does "we're a 501(c)(3)" actually mean?
• What election-related activity is permitted for a charity?
• What employment-law exemptions apply to religious charities?
• What entire activities are excluded from UBIT under § 513?
• What exactly must the compensation minutes record?
• What fiduciary duties do nonprofit directors owe?
• What happens if a § 501(h) electing charity exceeds its lobbying cap?
• What happens when a restricted gift becomes impossible to use as directed?
• What is a commercial co-venture and how is it regulated?
• What is an automatic excess benefit transaction?
• What is an excess benefit transaction?
• What is a qualified sponsorship payment?
• What is a supporting organization and why are Type IIIs scrutinized?
• What is a taxable expenditure under § 4945?
• What is automatic revocation under the three-year rule?
• What is fragmentation under § 513(c)?
• What is private inurement?
• What is § 4941 self-dealing, and is there a fairness defense?
• What is the 10% facts-and-circumstances test?
• What is the commerciality doctrine?
• What is the difference between direct and grassroots lobbying?
• What is the difference between "nonprofit" and "tax-exempt"?
• What is the duty of obedience?
• What is the grassroots sub-limit trap?
• What is the operational test?
• What is the organizational test?
• What is the private foundation minimum payout requirement?
• What is the quid pro quo disclosure rule?
• What is the § 4960 excise tax on high nonprofit compensation?
• What is the § 501(h) expenditure test?
• What is the social media trap for charities during an election?
• What is the state attorney general's role over charities?
• What is the substantial part test for lobbying?
• What is the unusual grant exception?
• What is "tipping" and how does a single gift cause it?
• What is UBIT siloing under § 512(a)(6)?
• What must a charity disclose to the public?
• What must a nonprofit's purpose clause say?
• What must the dissolution clause say?
• What passive income is excluded from UBTI?
• What should a nonprofit know about D&O insurance?
• What should nonprofit bylaws cover, and what happens at the organizational meeting?
• What special rules apply to nonprofit hospitals?
• What taxes does § 4958 impose?
• When is a licensing payment a royalty and when is it UBI?
• When is a volunteer actually an employee?
• When is rental income taxable to a charity?
• Which annual return does my exempt organization file?
• Which Form 990 schedules matter most?
• Which governance policies does the Form 990 ask about?
• Which model nonprofit corporation act does my state follow, and why does it matter?
• Which public support test should my organization use?
• Who is a disqualified person under § 4958?
• Who may make the § 501(h) election?
• Who owns work created by a nonprofit's volunteers?
• Why did Congress enact § 4958 intermediate sanctions?
• Why does Congress grant tax exemption at all?
• Why does public charity versus private foundation status matter so much?
• Why does the unrelated business income tax exist?
• Why do private foundations live under Chapter 42?
• Why do sophisticated donors care about public charity status?
• Why must a nonprofit screen its volunteers?