To show compliance, track volunteers’ hours compared to employees’ hours as a rule of thumb, paid work should reflect no more than 15 percent of the hours to host. Nonetheless, certain activities are excluded from unrelated business income-meaning that their income is not subject to tax:
The organization hosts these events regularly (weekly events qualify as regular annual events do not) and.
Raffles, drawings, and other games may generate unrelated business income if: Worse yet, engaging in too much unrelated business activity can threaten an entity’s tax exemption. If raffles, drawings, or other gaming activity falls outside an organization’s exempt purpose, their revenue is subject to unrelated business income tax.
