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> They just need to use the profits to achieve their goal. No. That is absurdly wrong. https://www.irs.gov/Charities-&-Non-Profits/Substantially-related https
by fweespeech 11y ago
> They just need to use the profits to achieve their goal.
No. That is absurdly wrong.
https://www.irs.gov/Charities-&-Non-Profits/Substantially-related https://www.irs.gov/Charities-&-Non-Profits/Substantially-re...
> To determine if a business activity is substantially related requires examining the relationship between the activities that generate income and the accomplishment of the organization's exempt purpose. Trade or business is related to exempt purposes, in the statutory sense, only when the conduct of the business activities has causal relationship to achieving exempt purposes (other than through the production of income). The causal relationship must be substantial. The activities that generate the income must contribute importantly to accomplishing the organization's exempt purposes to be substantially related.
i.e. The activity has to have a causal relationship to the exempt purpose regardless of the profit motive.
Good luck convincing people software licenses qualify in the current environment without a CPA and a Tax Attorney managing things end to end.
It can be done but not from the angle you claim. It has to be done for the direction of "This is our exempt purpose and by providing X we further that purpose despite the monetary gain to cover expenses."