← Complete study path

P2-U17 · PART 2 · SOURCE CYCLE 2026-2027

Tax-Exempt Organizations

Practice mapped questionsTake Part 2 mock

Only cards whose complete question and answer were checked against exact primary-authority evidence appear here.

Q1.The Alaskan Bird Rescue is a 501(c)(3) organization that is dedicated to saving wild birds. The organization was newly formed this year. What form must the organization file in order to request formal exemption from the IRS? A. Form 990 B. Form 1024-A C. Form 1024 D. Form 1023

Form 1023

Q2.Which of the following tax-exempt organizations are eligible to file Form 990-EZ? A. An organization with gross receipts of less than $1 million a year and total assets at the end of the year of less than $200,000. B. An organization with gross receipts of less than $200,000 a year or total assets at the end of the year of less than $1.5 million. C. An organization with gross receipts of less than $250,000 a year or total assets at the end of the year of less than $250,000. D. An organization with gross receipts of less than $200,000 a year and total assets at the end of the year of less than $500,000.

An organization with gross receipts of less than $200,000 a year and total assets at the end of the year of less than $500,000.

Q3.The Smith Family Foundation is a 501(c)3 private foundation founded by Bill and Betty Smith. The Smith Family Foundation is dedicated to the support and promotion of educational purposes for low-income families and impoverished children. The foundation had $90,000 in gross receipts for the year, and $100,000 in assets. Which annual tax form is the Smith Family Foundation required to file? A. Form 990-EZ B. Form 990 C. Form 990-N D. Form 990-PF

Form 990-PF

Q4.The Georgia Literary Association is an organization that fosters literacy programs for children and their parents. Which form should the organization use to apply for formal tax exemption under IRC section 501(c)(3)? A. Form 990 B. Form 1023 C. Literary organizations do not qualify for tax exemption under 501(c)(3) D. Form 1024

Form 1023

Q5.Which of the following acts may cause an exempt organization to lose its 501(c)(3) tax-exempt status? A. Receive large cash contributions from donors. B. Earn investment income. C. Participating in a political campaign on behalf of a candidate running for public office. D. Earning income generated from unrelated business activities.

Participating in a political campaign on behalf of a candidate running for public office.