If the requisite substantial causal relationship exists, the activity may be carried on even as a joint venture with a taxable organization and be nontaxable. Income from intercollegiate athletic events is not taxable since such events are substantially related to the University's educational function. The exempted income includes gate receipts, bowl game receipts, radio and television broadcast receipts, and game program receipts. The degree of reliance on volunteers. For purposes of the exclusion, research includes both fundamental research and applied research, including construction and production.
Fundamental research is undirected and carried on solely for satisfying human curiosity.
Applied research is conducted for the primary purpose of commercial or industrial application. Activities normally conducted as an incident to commercial or industrial operations, such as the ordinary testing or inspection of materials or products, and the designing or construction of equipment, buildings, etc., do not constitute research. Research contracts should be analyzed individually to determine tax implications.