Difference between revisions of "How to obtain tax-exempt status"
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To obtain tax-exempt status for an NGO that meets these criteria, the organization must file an application for federal income tax exemption with the IRS.<ref>A tax-exempt central organization may apply for a federal income tax exemption on behalf of its subordinate organizations. Internal Revenue Service, Tax-Exempt Status for Your Organization, Pub. 557 (rev. March 2005), 6, http://www.irs.gov/pub/irs-pdf/p557.pdf (accessed January 3, 2008). For more information on the group application process, see ibid., at 6-7.</ref> | To obtain tax-exempt status for an NGO that meets these criteria, the organization must file an application for federal income tax exemption with the IRS.<ref>A tax-exempt central organization may apply for a federal income tax exemption on behalf of its subordinate organizations. Internal Revenue Service, Tax-Exempt Status for Your Organization, Pub. 557 (rev. March 2005), 6, http://www.irs.gov/pub/irs-pdf/p557.pdf (accessed January 3, 2008). For more information on the group application process, see ibid., at 6-7.</ref> | ||
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An NGO’s application for federal tax-exempt status must include: | An NGO’s application for federal tax-exempt status must include: | ||
Revision as of 08:06, 11 August 2008
This article is intended to provide a general description of the process for obtaining 501(c)(3) status under the U.S. Internal Revenue Code and is not intended to substitute for the advice of private counsel on specific issues related to the IRC or the 501(c)(3) application process. Original draft by Bobby C. Neal.
In the United States, a non-governmental organization (NGO) is generally subject to federal, state, and local taxes unless and until the organization qualifies for tax-exempt status. This article focuses on the process for obtaining a federal income tax exemption for NGOs.[1] NGOs that meet the criteria set forth in 26 U.S.C. § 501 of the Internal Revenue Code (section 501) are eligible for a federal tax exemption.[2] The benefits to obtaining tax exempt recognition by the Internal Revenue Service (IRS) include: income tax exemption, eligibility to receive tax-deductible contributions, possible exemption from certain employment taxes, and reduced postal rates. Section 501 describes the organizations that are eligible for tax-exempt status. The most significant category of tax-exempt organizations is section 501(c)(3).
