There is a non-profit 501 (c) (3) Making Independent Business Taxable Income (ubtier) for advertising?

Non-profit organizations that are exempt from income tax under § 501 (a) the tax on business income are subject to independent scrutiny. § § 501 (b), 511 foreign business income gross income is from an organization of independent trade or business secrets, done regularly by it, less the amount authorized. § 512th An "independent trade secrets or business is any trade or business secrets, which is not substantially related (aside from the need for such organization for income or funds) toThe purpose of the organization. § 513th However, the secrets of the trade "or an independent business" there is no trade or business secrets, where almost all the work is done for the organization without compensation. § 513 (a) (1). See Rev. Rul. 75-201, 1975-1 CB 164

The sale of advertising space in a publication published by an organization exempt from tax is an independent business or trade secrets, if the advertising is carried out regularly. Reg 1512 (a) -1 (f) (1). See also Rev. Rul. 73-424, 1973-2 CB190.

The courts have ignored the advertising revenue of the business income are independent, in some cases. For example, in the National Collegiate Athletic Association. V. Comm (1990, CA10) 66 aftr 2D 90-5602, 914 F.2d 1417, 90-2USTC 50,513, revg (1989) 92 TC 456, advertising revenue through the sale of programs that NCAA is sponsored each year to receive The World Cup is not an independent business income, where the tournament took less than three weeks and came onceYear.

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

IRS differ NCAA, where a public university revenue from advertising in its football programs as flavors. Here there is a considerable time --span participated, were conducted on the activities. The football season lasts three months and work for the implementation of programs and asked Adverting lasted even longer. IRS letter and 9137002

Assuming that the magazine is published regularly throughout the year, a tax exempt organization should not count, National Collegiate Athletic Association. Regular publications and efforts may be appealed to an independent company to make a regular basis. See§ 512th

The Court does not take into account the income advertising revenue of independent firms in the United States against American College of Physicians, () 1986 S. Coach American College of Physicians, the Court concluded that the advertising industry is an important contribution to the training program for university students for training.

Although advertising revenues, rather than business income, whether advertising contributes to the goal of independent 'organization. EgPublication of legal notices in newspapers Bar Association contributes to the free use of the center to promote the common interests of a lawyer from a single source of information on legal events in the province and can not cause the loss of business entrance. Rev. Rul. 82-139, 1982-2 CB 108 But it will be advertising revenue through a bar association for attorney ads in its directory to receive taxable income, such as advertisingcommercial in nature and represents an effort by advertisers to sell to a particular part to maximize the public. IRS letter ruling 9,148,054 th

Similarly, advertising revenue through a tax exempt Magazine Trucking Association has not been given the scope of the association are exempt from tax to intervene if the marketing efforts of advertising is that advertisers sell their products. In this case, no systematic effort has been made by the organization to add products to the topic of advertisingeditorial content and made no effort was made by the Organization to restrict the advertising of new products. Florida Trucking Association, Inc. (1986) 87 TC 1039

It 'clear that with few exceptions, produces, without advertising revenue through a 501 (c) (3) organization of independent companies, often received a taxable income (ubtier).