steward (02/10/83)
I just came across the following in Conrad Teitell's Taxwise Giving newsletter. A letter ruling is not a precedent, but it gives some idea of the IRS's position. "Computer service is an unrelated business - IRS letter ruling. A tax-exempt organization provides computerized billing and payroll services to two other exempt organizations. The services, said the IRS, constitute ordinary commercial activities. Thus, income received for the services is Unrelated Business Taxable Income." Letter Ruling 8225097 This alone is bad enough for tax-exempt organizations trying to pay for their computer, but I wonder what their opinion will be when they focus on the minutia of time-sharing.