From: utzoo!decvax!harpo!floyd!cmcl2!rocky2!steward
Newsgroups: net.taxes
Title: Computer Service Letter Ruling
Article-I.D.: rocky2.146
Posted: Wed Feb  9 16:56:42 1983
Received: Tue Feb 15 07:57:16 1983

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.