These organizations are truly not-for-profit entities, they are not nonprofit, in fact many of these organizations generate very large profits. They typically do not pay tax on their earnings as long as it generated by efforts that relate to their exempt purpose. If the income is not related to their exempt purpose, they can be subject to Unrelated Business Income Tax, referred to as UBIT in the nonprofit community. They have their on set of twists and turns.
We have primarily provided audit and tax services to these organizations. The tax form 990 and 990T are incredibly complicated and detailed. These retruns require the most hours to complete then any other tax retruns we do. We have served primarily membership organizations and foundations.