Difference between revisions of "How to obtain tax-exempt status"
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The '''operational test''' has limited applicability because the integral-part test is more specific.<ref>Ibid.</ref> An NGO can fail the operational test and the integral-part test if the NGO performs activities that do not constitute activities that, but for the NGO, a publicly supported organization would have performed.<ref>Ibid.</ref> | The '''operational test''' has limited applicability because the integral-part test is more specific.<ref>Ibid.</ref> An NGO can fail the operational test and the integral-part test if the NGO performs activities that do not constitute activities that, but for the NGO, a publicly supported organization would have performed.<ref>Ibid.</ref> | ||
| − | ====Section 509(a)(4) | + | ====Section 509(a)(4) Organizations==== |
Private foundations or other organizations that test products for public safety are considered public charities under section 509(a)(4).<ref>Ibid, p. 44.</ref> | Private foundations or other organizations that test products for public safety are considered public charities under section 509(a)(4).<ref>Ibid, p. 44.</ref> | ||
Revision as of 11:34, 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).
