Tax-exempt non-profit organizations

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501(c) is a subsection of the United States Internal Revenue Code (usc|26|501(c)), which lists 28 types of tax exempt non-profit organizations.

Types

The most common 501(c) organizations include:

  • 501(c)(1) - Corporations organized under acts of Congress such as Federal Credit Unions
  • 501(c)(2) - Title holding corporations for exempt organizations
  • 501(c)(3) - Various charitable, non-profit, religious, and educational organizations (see below)
  • 501(c)(4) - Various political education organizations (see below)
  • 501(c)(6) - Business league and chamber of commerce organizations (see below)
  • 501(c)(7) - Recreational club organizations

501(c)(3)

Section 501(c)(3) is just one of the tax law provisions granting exemption from the federal income tax to non-profit organizations. This exemption does not cover other federal taxes such as employment taxes.

501(c)(3) exemptions apply to corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety (described under 509(a)(4) of the code which makes the organization a public charity and not a private foundation, and contributions to 509(a)(4) organizations are not deductible to the donor for federal income, estate, or gift tax purposes), literary, or educational purposes, or to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals.

Another provision, usc|26|170, provides a deduction, for federal income tax purposes, for some donors who make charitable contributions to 501(c)(3) organizations.

501(c)(3) status for charities and the related section 170 deduction for donors are important to many charitable groups. Some individuals and groups (and virtually all foundations) will not give to a charity if it does not have 501(c)(3) status. Therefore, loss of this status can be harmful to a charity's existence.

Organizations with this classification are prohibited from lobbying to influence to elections and legislation. [1]

External links