Tax Law for Nonprofits as it Pertains to Cultural Institutions : A Summer Internship at the Kalamazoo Institute of Art

Abstract

The author describes her work at the Kalamazoo Institute of Arts with the bookkeeper, Irene Golike, and the registrar, Kathleen Buday. The author’s work at the KIA prompted an interest in nonprofit tax law; specifically, how tax exemption status is decided and how it affects cultural organizations like the KIA. About ten percent of America's GDP is generated by nonprofit organizations, which encompass everything from churches and museums to retirement associations and universities. Once an application for tax exempt status has been approved by the IRS, nonprofit organizations enjoy many benefits such as exemption from all taxes on activities related to the entity's reason for tax exemption, and exemption on donations for the donors, which promotes more and larger contributions.