Engaging in a prohibited transaction can result in an exempt organization being subject to Federal income tax, but cannot cause it to lose its exempt status unless the exempt organization repeats the prohibited transaction.

Question

Quizplus · Accepted Answer

Engaging in a prohibited transaction can lead to an exempt organization losing its tax-exempt status, even if it is a single occurrence, depending on the severity and nature of the transaction.

Engaging in a Prohibited Transaction Can Result in an Exempt