The Law of Tax-Exempt Organizations, 10th Edition 2014 Cumulative Supplement

CHAPTER THREE

Source, Advantages, and Disadvantages of Tax Exemption

*§ 3.2 Recognition of Tax Exemption

§ 3.2A Recognition of Public Charity, Private Foundation Status (New)

§ 3.2 RECOGNITION OF TAX EXEMPTION

*p. 46, first complete paragraph, ninth line. Insert following first comma:

a nonprofit health insurance issuer,

p. 46, n. 26, second line. Delete Rev. Proc. 2010-9, 2010-2 I.R.B. 258 and insert:

Rev. Proc. 2014-10, 2014-2 I.R.B. 293 § 4.01.

*p. 46, n. 28. Insert IRC § 501(c)(29)(B)(i), following second comma; insert 25.6, following fifth comma.

p. 46, n. 30. Insert as second paragraph:

The IRS, from time to time, will deny an applicant organization recognition of exemption, and then, when the organization pays income taxes and sues for a refund on the ground that it is an exempt organization (see § 26.5(a)), the IRS will refund the taxes (and interest and penalties), thereby mooting the case; yet the IRS will refuse to explain the basis for the refund, thus leaving the organization uncertain about its exempt status in future years (e.g., Christian Coalition of Florida, Inc. v. United States, 2010-2 U.S.T.C. ¶ 50,558 (M.D. Fl. 2010), aff'd, Nov. 15, 2011 (11th Cir.)).

*p. 47, carryover paragraph, sixth line. Insert following charity:

, credit counseling/social welfare organization, nonprofit health insurance issuer,

p. 47. Insert as third complete paragraph, before heading:

§ 3.2A RECOGNITION OF PUBLIC CHARITY, PRIVATE FOUNDATION STATUS (NEW)

The IRS expanded this concept ...