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Unformatted text preview: Chapter 15 - Not-for-Profit Organizations—Regulatory, Taxation, and Performance Issues 15-1 CHAPTER 15: NOT-FOR-PROFIT ORGANIZATIONS – REGULATORY, TAXATION, AND PERFORMANCE ISSUES OUTLINE Number Topic Type/Task Status (re: 14/e) Questions: 15-1 Regulatory authority of states and federal government Explain 15-2, revised 15-2 Legislative and political activity Describe New 15-3 Tax-exempt categories Identify 15-4, revised 15-4 Public charities and private foundations Compare and contrast New 15-5 Revised Form 990 Compare New 15-6 Unrelated business income tax Discuss 15-7 15-7 Audit committees Explain New 15-8 Intermediate sanctions Discuss Same 15-9 Performance measures Identify New 15-10 Incorporating documents Identify, explain Same Cases: 15-1 Establishing an NPO Recommend 15-1, revised 15-2 UBIT and advertising Evaluate Same 15-3 Financial performance measures of largest NPOs Internet 15-3, revised 15-4 Nonfinancial performance measures Internet New Exercises/Problems: 15-1 Various Multiple choice New 15-2 Public charity Compute 15-2, revised 15-3 Lobbying expenses Describe Same 15-4 UBIT Evaluate New 15-5 Gift shop and UBIT Compute Same 15-6 Intermediate sanctions Determine Same 15-7 Investment performance Internet, discuss New 15-8 Performance measures American Heart Association Compute and analyze 15-7, revised Chapter 15 - Not-for-Profit Organizations—Regulatory, Taxation, and Performance Issues 15-2 CHAPTER 15: NOT-FOR-PROFIT ORGANIZATIONS - REGULATORY AND TAXATION ISSUES Answers to Questions 15-1. A state government grants legal existence to a not-for-profit entity in the form of a not- for-profit corporation or as a charitable trust. As a result, the state has a responsibility to monitor the actions of the NPO’s managers, and the NPO has a responsibility to report, as required, to the state government. The public looks to the state to monitor the charitable organization so it operates for the public good. Very often these regulations are in the nature of consumer protection, such as licenses for charitable solicitation. If a not-for- profit corporation or trust applies to the federal government for tax-exempt status, and it is granted, then the Internal Revenue Service has been designated as the federal office that ensures compliance with laws and regulations over tax-exempt entities. 15-2. A not-for-profit organization (NPO) must be cognizant of the state and federal regulations that constrain legislative and political activity. Although these regulations differ somewhat among the states and the federal government, in general, the NPO can advocate for its cause, educate the public about the homeless and their needs, but it should not attempt to influence legislation or campaign for a particular candidate who supports its position. Examples of activities that should be avoided are publication of position statements on behalf of the organization in support of the legislation and candidates who support it, public statements to that effect, contributions to political...
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- Fall '08
- Accounting, Taxation in the United States, Charitable organization, Non-profit organization, Not-for-Profit Organizations—Regulatory, Performance Issues Ch.