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Lessening the Burden of Government

Last modified: June 29, 2022
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DEFINITION

An activity is a burden of government if there is an objective manifestation by a governmental unit that it considers the activities of the organization to be its burden.

BEST PRACTICE

There are countless programs being conducted by non-profit organizations that may impact the burdens of government, but do not meet the definition of lessening the burden of government. Though such programs have an indirect benefit to the public, and therefore remove the burden of government to support the public, intent and direct lines to the government and government programming is necessary.

In all cases where an organization claims to lessen the burdens of government, one must ascertain whether the activity engaged in by the organization is one that, in fact, could be performed by a governmental unit. State constitutions or statutes may prohibit municipalities from engaging in certain activities. If an organization is created to perform these prohibited activities, it is not entitled to exemption on a “lessening the burdens” basis. After all, if the government cannot perform an activity, how can that activity be a burden of government?

In some instances, it will be very clear that an organization is meeting the definition as there may be a state or local statute that gives specific direction as to how an exempt organization can and should be formed to serve a specific stated purpose. At other times, direction may be less structured, but still provide in writing the need for an organization to be established to meet a need of the government.

Organizations working closely with governments are part of the Facts and Circumstances the IRS will consider as well in reviewing a request for qualifying for exemption as an organization that is lessening the burdens of government. Letters from such agencies, documenting the need for an exempt organization to conduct the activities is common supporting documentation which can be provided to the IRS to show the entity does qualify as a 501(c)(3) entity.

 

RESOURCES

1993 EO CPE Text

Revenue Ruling 85-1

Revenue Ruling 85-2

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