Publication 598 - Introductory Material

What's New

  • Federal tax deposits must be made by electronic funds transfer. Beginning January 1, 2011, you must use electronic funds transfer to make all federal tax deposits. Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after 2010. See Federal Tax Deposits Must be Made by Electronic Funds Transfer on page 3.

  • For large corporations, special rules apply for estimated tax payments that are required to be made for the period that includes July, August, or September of 2012, and the period that immediately follows these months. See the instructions for line 12 on the 2012 Form 990-W (Worksheet), Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations.

  • The maximum cost of a low-cost article, for organizations eligible to receive charitable contributions, was increased to $9.70 for 2011. See Distribution of low-cost articles on page 8.

  • The annual limit on associate member dues received by an agricultural or horticultural organization not treated as gross income was increased to $148 for 2011. See Exception under Dues of Agricultural Organizations and Business Leagues on page 10.

  • The IRS has created a page on that includes information about Pub. 598 at


An exempt organization is not taxed on its income from an activity substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. Such income is exempt even if the activity is a trade or business.

However, if an exempt organization regularly carries on a trade or business not substantially related to its exempt purpose, except that it provides funds to carry out that purpose, the organization is subject to tax on its income from that unrelated trade or business.

This publication covers the rules for the tax on unrelated business income of exempt organizations. It explains:

  1. Which organizations are subject to the tax (chapter 1),

  2. What the requirements are for filing a tax return (chapter 2),

  3. What an unrelated trade or business is (chapter 3), and

  4. How to figure unrelated business taxable income (chapter 4).

All section references in this publication are to the Internal Revenue Code.

Useful Items - You may want to see:


  • 557 Tax-Exempt Status for Your Organization

Form (and Instructions)

  • 990-T Exempt Organization Business Income Tax Return

See chapter 5 for information about getting these publications and forms.

Comments and suggestions.   We welcome your comments about this publication and your suggestions for future editions.

  You can write to us at:

Internal Revenue Service 
Individual Forms and Publications Branch 
1111 Constitution Ave. NW, IR-6526 
Washington, DC 20224

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