CHAPTER 20
Private Inurement and Intermediate Sanctions
*§ 20.2 Salaries and Other Compensation
§ 20.8 Services Rendered for Individuals
*(b) When Private Benefit Is Found
*p. 588. Add after third introductory paragraph:
Private benefit was found to accrue to parents of cheerleaders. The members of the organization volunteer their time to operate concession stands at school events to pay for tuition, books, and apparel for their children. The fact that the receipts were allocated to the members based on the number of events in which they participated indicated private inurement to the parents who were relieved of the burden of paying such expenses for their children.1 A proposed § 501(c)(4) entity provided services to “fee-paying entrepreneurs and businesses” to enhance their available capital investments operated to privately benefit its members and could not qualify for exemption.2 Similarly, private inurement was found when the parents who raised money for an amateur sports competition were excused from paying part or all of the cost of their children's event entry fees attributable to the funds they raised for the organization. The IRS said those parents received net earnings from the entity and therefore received private inurement.3
§ 20.1 Defining Inurement
(a) Persons Involved
p. 589. Add to third sentence of introductory paragraph:
The IRS asserts4 that a nonprofit organization governed by related ...
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