📏CPA EXAM PREP

Tax-Exempt Organizations / business inco

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Question

Why does private inurement threaten exempt status?

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Answer

An insider cannot benefit from net earnings; violation risks revocation.

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Question

How do intermediate sanctions differ from revocation for excess benefit transactions?

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Answer

They tax the disqualified person without revoking exemption.

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Question

What filing consequence follows three consecutive years of non-filing?

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Answer

Automatic revocation of exempt status.

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Question

When must an exempt organization file Form 990-T?

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Answer

When gross UBI is at least $1,000.

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