M is a university that has been recognized as exempt from
federal income tax under § 501(a) as an organization
described in § 501(c)(3). As a part of its educational
programs, M offers summer seminars to enhance the skill
level of elementary and secondary school teachers.
To expand the reach of its teacher training seminars, M forms
a domestic LLC, L, with O, a company that specializes in
conducting interactive video training programs. L’s Articles
of Organization and Operating Agreement (“governing
documents”) provide that the sole purpose of L is to offer
teacher training seminars at off-campus locations using
interactive video technology. M and O each hold a 50
percent ownership interest in L, which is proportionate to
the value of their respective capital contributions to L.
The governing documents provide that all returns of capital,
allocations and distributions shall be made in proportion to
the members’ respective ownership interests.
Internal Revenue Service
Rev. Rul. 2004-51, 2004-22 I.R.B (June 1, 2004)
Minister F is the minister of Church O. The
Sunday before the November election,
Minister F invited Senate Candidate X to
preach to her congregation during worship
services. During his remarks, Candidate X
stated, “I am asking not only for your
votes, but for your enthusiasm and
dedication, for your willingness to go the
extra mile to get a very large turnout on
Tuesday.” Minister F invited no other
candidate to address her congregation
during the Senatorial campaign.
Internal Revenue Service Guide for Churches and Religious Organizations.
The organization, which is exempt from federal income tax
under section 501(c)(3) of the Code, was formed to assist a
specific university and carries out its activities in close
consultation and cooperation with university officials. These
activities are the receipt of contributions for the benefit of
the university, assistance to the university's academic
departments in problems of financial management, and management of
vending machines facilities in all parts of the campus.
The vending operations include soft drink and food vending
services and laundromat facilities. In some cases, the
organization has contracted with a vending company for the
placement of vending machines on the campus. In other cases, the
organization has purchased the machines and manages then itself. This
activity assists the university by providing centralized, efficient
management of vending operations throughout the campus and by
relieving the university of the associated administrative
burden. All profits from the vending operations are distributed
to the university.