List activities against the unrelated-business-income description
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- List each activity in the file, any gross income figure the file states for it, and whether the file describes it as a trade or business regularly carried on. Do not decide that an activity is substantially related to the exempt purpose, and do not prepare a return.
- What the lawyer must review
- You decide whether income is unrelated business income, and you prepare any return. The IRS page on unrelated business income tax says that an organisation recognised as tax exempt may still be liable for tax on its unrelated business income. For most organisations, that income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of the exemption. An exempt organisation that has $1,000 or more of gross income from an unrelated business must file Form 990-T. An organisation must pay estimated tax if it expects its tax for the year to be $500 or more. The Form 990-T obligation is in addition to Form 990, 990-EZ, or 990-PF. The page does not state a goods-and-services tax or a fringe-benefits tax. Special rules for organisations exempt under sections 501(c)(7), 501(c)(9), 501(c)(17), and 501(c)(20) are on a page that was not opened. Treasury Regulation § 1.501(c)(3)-1(c)(1) provides that an organisation is regarded as operated exclusively for exempt purposes only if it engages primarily in activities which accomplish one or more of those purposes, and it will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt purpose. That operational test is not the definition of unrelated business income.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Consider narrowly defined preparation support after confirming the tool’s capability and permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.