Posts Tagged ‘Non-Profit’

IRS To Exam Trade Associations And Labor Organizations In 2011

Tuesday, May 31st, 2011

In its FY 2011 work plan, the Exempt Organizations Division of the IRS announced that they are increasing their focus on Section 501 (c) (4), (5) and (6) organizations.  In their FY 2011 Annual Report and Workplan, the IRS stated that “with the additional information available on the new Form 990, we will look at issues including political activity, inurement and the extent of compliance with the requirements for tax exemption by organizations that self-identified themselves as a Section 501 (c) (4), (5), or (6) organization”.

Read the rest of this post »

Inurement – Is That Really a Word?

Tuesday, May 31st, 2011

Although it is doubtful the word “inurement” is used in normal conversations, the IRS has a particular fondness for its use and is one of the areas they plan to examine in their 2011 audit work plan.  However, even the IRS seems to have difficulty formulating an exact definition of the term, stating that, “Inurement is likely to arise where the financial benefit represents a transfer of the organization’s financial resources to an individual solely by virtue of the individual’s relationship with the organization, and without regard to accomplishing exempt purposes”.
The term appears to be used most frequently when the IRS is discussing organizations exempt under 501(c) (6) which code section states “no part of the net earnings” of an organization may “inure to the benefit of any private shareholder or individual”.  However, the term applies to a number of exempt organizations including 501 (c) (3), (4) and (5) organizations.

Read the rest of this post »