Reforming Nonprofit Exemption Requirements

70 Pages Posted: 31 May 2011 Last revised: 28 Jun 2014

Peter Molk

Willamette University - College of Law

Date Written: 2012

Abstract

This Article proposes a reform for nonprofit exemption and unrelated business income tax. Current tax law provides unclear guidance and requires exempt organizations to risk their entire exemptions on this guidance, leading them to make the socially inefficient choice to use for-profit subsidiaries to preserve their exemptions. Reforming the tax law will solve this inefficiency while providing exempt nonprofits with the desirable option to undertake efficient nonexempt activities to augment their operating budgets. This reform is particularly important in light of changes to the healthcare field; reform will enable exempt healthcare organizations to offset rising health costs and decreased reimbursements with other revenue opportunities.

Keywords: nonprofit, UBIT, tax, corporate organization

JEL Classification: H21, H25, H40, H41, K34, l30, l31

Suggested Citation

Molk, Peter, Reforming Nonprofit Exemption Requirements (2012). Fordham Journal of Corporate and Financial Law, Vol. 17. Available at SSRN: https://ssrn.com/abstract=1853426

Peter Molk (Contact Author)

Willamette University - College of Law ( email )

245 Winter St. SE
Salem, OR 97301
United States

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