Ethel Carew
Tax Exemption Assignment #2
Due 3/16/15
The key to a mutually beneficial corporate sponsorship agreement is for both parties involve to enter into a written, legally enforceable agreement. One that will spell out the scope of the agreement in terms of fees, mutual expectations, ongoing oversight, follow-up procedures and procedure (s) for termination should any party default.
Corporate sponsorship income is vigorously scrutinized by the IRS and a non- profit organization such as Mega Health Systems (MHS) must exercise prudence when structuring a sponsorship agreement with a for- profit organization like ours. A review of the agreement by attorneys representing both parties is strongly advised as any small changes in wording …show more content…
If that is the case, I would want to know if the joint venture agreement include adequate protections to ensure that the birthing center is operated for charitable purposes and if it does, how they are fulfilling that clause. Where there appropriate protections included in the agreement such as binding charitable purpose provisions and policies that require the birthing center to provide specific community benefits in furtherance of the Hospital’s charitable …show more content…
v. Commissioner, 113 T.C. 47 (1999) the court ruled that Redlands lacked control and informal influence to enable it to monitor the surgery center's operations and could not show it operated exclusively for charitable purposes through the joint venture operations. It was also concluded that the joint venture benefited Redlands for profit partners more than incidentally, causing Redlands to operate for a substantial nonexempt purpose. The Service also concluded that the surgery center did not operate to promote the health of the community as in in Rev. Rul. 69-545, 1969-2 C.B.
Tax Exemption Assignment #2
Due 3/16/15
The key to a mutually beneficial corporate sponsorship agreement is for both parties involve to enter into a written, legally enforceable agreement. One that will spell out the scope of the agreement in terms of fees, mutual expectations, ongoing oversight, follow-up procedures and procedure (s) for termination should any party default.
Corporate sponsorship income is vigorously scrutinized by the IRS and a non- profit organization such as Mega Health Systems (MHS) must exercise prudence when structuring a sponsorship agreement with a for- profit organization like ours. A review of the agreement by attorneys representing both parties is strongly advised as any small changes in wording …show more content…
If that is the case, I would want to know if the joint venture agreement include adequate protections to ensure that the birthing center is operated for charitable purposes and if it does, how they are fulfilling that clause. Where there appropriate protections included in the agreement such as binding charitable purpose provisions and policies that require the birthing center to provide specific community benefits in furtherance of the Hospital’s charitable …show more content…
v. Commissioner, 113 T.C. 47 (1999) the court ruled that Redlands lacked control and informal influence to enable it to monitor the surgery center's operations and could not show it operated exclusively for charitable purposes through the joint venture operations. It was also concluded that the joint venture benefited Redlands for profit partners more than incidentally, causing Redlands to operate for a substantial nonexempt purpose. The Service also concluded that the surgery center did not operate to promote the health of the community as in in Rev. Rul. 69-545, 1969-2 C.B.