November 22, 2021
The Internal Revenue Code’s public support test provisions use mathematical income tests measured over an aggregate 5-year computation period to determine the tax status of public charities and private foundations. These provisions are particularly important for public charities which are required to have at least one-third of their revenue come from the public, government sources, or grantmaking organizations. If they fail the public support test, charities risk being converted to a less-beneficial private foundation tax status and donors miss out on a favorable tax deduction. It is important that leadership understand these provisions and proactively address any potential tax status issues.
The articles below explain the basics of the IRS’ public support tests. For questions or more information, contact us through our website form.
Public Support Tests: Does Your Public Charity Pass the Section 509(a)(1) Test?
Public Support Tests: How a Public Charity is Defined Under Sec. 509(a)(2)?
Public Support Tests: Why You Might Prefer Public Charity to Private Foundation?
