Affiliated Service Group

[Belgarath]

I'm wondering whether a radio station would be considered a "service organization" for these purposes. I think it is not. There is a substantial investment in equipment, transmitters, etc., etc., and there's no personal service performed by "one or more individuals."

Any other thoughts?

[C. B. Zeller]

It does seem like capital is a material income-producing factor for a radio station.

However "performing arts" is one of the specified fields that is automatically a service organization. I'm not sure if a radio station is in the field of performing arts. If it's primarily talk radio, as in it's broadcasting content created by its own employees, then maybe. If it's mostly playing music created by others, then probably not.

[Belgarath]

Some of both. But the majority is playing music created by various artists - typical stuff. We always specify that they need to make their own decision, with the advice of legal/tax counsel, but they rarely do...

On a smell test, I wouldn't classify this as a "performing arts" situation.

[CuseFan]

I find these sorts of situations very interesting and very confusing. For a radio station, yes, you need equipment to function, but is it that equipment that is income-producing? One could argue that it is advertising revenue which is a function of artistic content rather than equipment. Dentists invest tremendous amounts of capital in their equipment, but no one argues they are not a service organization, right,  because it is their knowledge and skill in using such that is income-producing? Which is why code specifically says they're professional services.

I'm not saying your radio station is or isn't a service organization, just that it's so darn gray/confusing that I say sometimes you need to steer them to the rules and then punt to the client, suggesting legal counsel aid in their decision, and ultimately disclaim responsibility for THEIR decision.

[Belgarath]

Agreed. As I said, we always specify it is their decision, with the advice of tax/legal counsel. We do provide "discussion points" to educate them and for them to discuss with their attorney, with references to Code/regs. It's just that they hardly ever do. I can probably count on my fingers and toes the number of times in the last 10 years or so that a client actually has done so.  

[CuseFan]

5 hours ago, Belgarath said:

It's that they hardly ever do. 

All you can do is lead them to water, if they go thirsty that is their choice.