Are you a member off a group that has tax-exempt status with the federal government? If your group or organization is paying federal taxes, then you should explore tax-exempt status. See how much you know about ways to be tax-exempt by taking this quiz.
An organization is probably not qualified to receive tax-exempt status if it:
has more than $5,000 in reserve funds at any given time
sells items or services in order to raise funds
makes money on behalf of its leaders or members
Are groups that exhibit livestock or farm products allowed to obtain tax-exempt status?
only if they do not charge admission
Is a group that sponsors horseracing allowed to enjoy tax-exempt status?
only if the purse is under $250
What is a general restriction to any given church having tax-exempt status?
A tax-exempt church must not have fewer than 100 active members.
A tax-exempt church must not be involved in real estate transactions.
A tax-exempt church must not be involved in a political campaign.
In the Internal Revenue Code, is the definition of a “church” intended to include synagogues and mosques?
only if they have more than 100 active members
What is a benefit to churches in obtaining a tax-exempt status from the IRS?
They must obtain tax-exempt status in order to avoid paying taxes.
People that make financial contributions to tax-exempt churches can claim tax-deductions.
Offerings collected are not taxable as long as the church has official tax-exempt status.
What is a requirement incumbent upon a fraternal order to obtain tax-exempt status?
Fraternal orders must be organized under a lodge system.
Fraternal orders must hold meetings monthly and maintain formal meeting minutes.
Fraternal orders must be nondiscriminatory regarding race and color.
Are fraternal organizations permitted to offer members benefits such as group health and life insurance?
All tax-exempt fraternal organizations are permitted to offer benefits.
Tax-exempt fraternal organizations are not permitted to offer benefits.
They may only offer benefits if classed as a beneficiary fraternal organization.
Under what category could places like museums and zoos fit in order to obtain tax-exempt status?
What organization would not normally qualify in the educational category even though they offer courses or lectures?
presents on-line classes
presents unsupported viewpoints
presents political classes
What is the U.S. federal tax code definition of a social welfare organization?
Organizations created to contribute to the well-being of a community.
Organizations created to foster urban renewal projects in dilapidated communities.
Organizations created to operate private airports on behalf of clubs and flight organizations.
Under federal law, is a labor organization permitted to maintain tax-exempt status?
A labor organization can be tax-exempt only if it also produces a newspaper that covers labor issues.
Labor organizations are not permitted to have tax-exempt status.
A labor organization may be tax-exempt if it engages in collective bargaining and maintains a strike fund.
Under the tax code, is a tax-exempt social club permitted to restrict membership by religion?
Yes, religion can be used as a membership criteria without any restrictions.
Membership restrictions may not be based on religion.
They may restrict membership to particular religion only if the shared religion is the main purpose of the club.
Which of the following is not considered eligible for tax-exempt status as a social club?
any country club with restricted membership
any dinner club that restricts membership
any clubs with income that reduces member dues
According to the U.S. tax law, what percentage of membership in a veterans group must be U.S armed forces veterans or current members?
Which of the following activities are not considered an eligible veterans group function?
activities of a patriotic nature
recreational activities for veterans
investment programs for veterans
How can an organization that has a purpose to conduct scientific research qualify for tax-exempt status under federal law?
Only companies doing scientific research to cure major diseases can receive tax-exempt status.
Organizations doing scientific research with results openly available to the public receive tax-exempt status.
Only companies conducting scientific research in a field related to medicine may receive tax-exempt status.
Tax-exemption law defines a trade association as:
a group of people with a common business interest
a group of people that trade investment quality collectables that are not for sale
a group of people that sponsors professional lobbyists to champion their causes
What section of the U.S. Internal Revenue Code applies to determining a tax-exempt organization?
How many types of organizations does the United States Internal Revenue Code 501(c) list as possible tax-exempt entities?