Section 6050I of the Internal Revenue Code

The IRS recently issued a reminder to tax-exempt organizations.

Church Law and Tax 1991-01-01 Recent Developments

Financial Regulation

A recent IRS notice reminds tax-exempt organizations that Section 6050I of the Internal Revenue Code requires that any organization (including a charity) receiving cash in excess of $10,000 in one transaction (or in any two or more related transactions) in the course of a “trade or business” must file a Form 8300 with the IRS. The term “trade or business” is defined broadly to include any sale of goods or services to produce income. Charities should combine cash installments of less than $10,000 that relate to a single transaction if they exceed $10,000 during a year. The IRS notice gives as an example a charity that receives a cash payment in excess of $10,000 for the rental of part of its building. Such a charity would have to file Form 8300 whether or not the $10,000 constitutes “unrelated business income.” On the other hand, a charity that receives a cash contribution in excess of $10,000 would not need to file a Form 8300 since the funds were not received in the course of a trade or business. IRS Notice 90-61.

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