Exam 13: Not-for-Profit Organizations—Regulatory, Taxation, and Performance Issues

Not-for-profit organizations risk loss of their tax-exempt status if they participate in a political campaign on behalf of a candidate for public office.

The not-for-profit organization applying for tax-exempt status determines the appropriate subsection under IRC Sec. 501 for which it wants to be considered and the Internal Revenue Service then approves or denies the application.

The lack of defined ownership for not-for-profit organizations creates control and reporting problems for not-for-profit managers.

Why do states and the federal government exercise oversight responsibility over not-for-profit, tax-exempt corporations? How do states and the federal government differ in the way they exercise this responsibility?

If a tax-exempt organization dissolves and goes out of business, it must distribute its assets to another tax-exempt organization or a governmental entity.

One of the limitations of financial ratio analysis for not-for-profit organizations is that donors may incorrectly assume that there are federal or state laws that govern the percentage of annual revenues that a charity must spend on its programs.

A not-for-profit organization is granted its legal status by which of the following?

Which of the following is not a True statement about tax-exempt organizations?

All of the following organizations may be not-for-profit except:

The Form 990 consists of 12 parts (core form) and several schedules. Which of the following would not be included as one of the parts of the core form of the Form 990?

The term that means information skewed toward a particular belief with a tendency to have little or no factual basis is:

Board members of a not-for-profit organization have a fiduciary responsibility to provide fiscal guidance and ongoing governance over the not-for-profit organization to ensure that its exempt mission is carried out as described in the incorporating documents and exempt application.

All not-for-profit organizations are required to file some type of Form 990 with the Internal Revenue Service.

The federal government's primary objective in regulating not-for-profit organizations through the income tax laws is to limit the number of exempt organizations that operate at any one point in time.

A good measure that can be used to help assess whether a not-for-profit organization is spending too much on overhead, such as general and administrative expenses, is:

Which of the following is the incorporating document of a not-for-profit organization that describes the purpose or mission of the organization?

Your client is a nongovernmental not-for-profit museum that operates a gift shop. Explain the unrelated business income tax to your client and suggest ways to avoid this tax.

Which of the following is a reason why a not-for-profit organization might fail to qualify for tax-exempt status?

A good measure of whether a not-for-profit organization is efficient in its fund-raising efforts is:

All officers of a not-for-profit organization have the same responsibilities to the organization and its constituents.