Is there a non-profit 501 (c) (3) Realize Unrelated Business Taxable Income (ubtier) for advertising?

Non-profit organizations that are exempt from income tax under § 501 (a) the income tax on business income are subject to independent. § § 501 (b), 511 Unrelated business income is gross income derived by an organization from an unrelated trade or business secrets, regularly carried on by it, less the amounts allowed. § 512th An "unrelated trade or business secrets" is a trade or business secrets, which is not substantially related (aside from the need for such organization for income or funds) to the purpose ofthe organization. § 513th However, "independent trade or business secrets" does not include any trade or business secrets where substantially all work is done for the organization without compensation. § 513 (a) (1). See Rev. Rul. 75-201, 1975-1 CB 164th

The sale of advertising in a publication published by an exempt organization is an independent trade or business secrets, if the advertising business is regularly carried out. Reg 1.512 (a) -1 (f) (1). See also Rev. Rul. 73-424, 1973-2 CB 190th

Courtsdo not constitute advertising revenue rather than to unrelated business income, in some cases. For example, in National Collegiate Athletic Association. V. Comm., (1990, CA10) 66 AFTRS 2d 90-5602, 914 F.2d 1417, 90-2USTC 50513, revg (1989) 92 TC 456, advertising revenue through the NCAA from the sale of programs, which is sponsored annually receive World Cup tournament was not unrelated business income, where the tournament took less than three weeks and came only once a year.

IRSChief Counsel "strongly agree" with the Tenth Circuit. The IRS argued the district court should have considered the time spent soliciting advertising and the preparation of advertising for publication. IRS announced that it continues to argue the issue in appropriate cases. Action on Decision 1991-015, 7/3/91.

IRS differ NCAA, where a public university revenues from advertising in its football souvenir programs given. Here is a considerable amount of timewas involved, were conducted on the activities. The football season lasts three months and the work in setting up the programs and asked for Adverting lasted even longer. IRS letter submitted 9,137,002th

Under the assumption that the magazine is published regularly throughout the year, a tax-exempt organization should not rely, National Collegiate Athletic Association. The regular publication and makes efforts is likely to call for an independent company to make a regular basis.See § 512th

The court did not consider the advertising income to unrelated business income in the United States v. American College of Physicians, () 1986 S. Ct. The American College of Physicians, the court found that the advertising industry a significant contribution to the University's educational program through the education of students.

Even if the advertising revenue rather than an independent business income if the advertising contributes to the organizationPurpose. For example, the publication falls within the legal advice in a Bar Association Journal exempt purposes of the society by promoting the common interests of the lawyer through a single source of information on legal events in the province and would therefore not result in unrelated business income. Rev. Rul. 82-139, 1982-2 CB 108th But it will be advertising revenue through a bar association for attorney ads in their directory to receive taxable income fromthe advertising of a commercial nature and represents an effort on the part of advertisers to sell to a particular part of the public maximize. IRS Letter Ruling 9,148,054th

Likewise, the magazine advertising revenue through a tax-exempt trucking association did not receive from the tax exempt purposes of the association to respond if the advertising marketing efforts represented by the advertisers sell their products. In this case, no systematic effort was made to advertise made by the organization toProducts on the editorial content and no effort was made by the Organization, to restrict advertising for new products. Florida Trucking Association, Inc. (1986) 87 TC 1039th

It is clear that with few exceptions, produces, free of advertising revenue through a 501 (c) (3) organization of independent companies often receive taxable income (ubtier).


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