Difference between revisions of "How to obtain tax-exempt status"
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Additionally, the schools must include a statement in their governing documents that it has a racially nondiscriminatory policy and the NGO must circulate information on the school’s admission policies.<ref>Ibid. Further, private schools must keep four specific types of records for a minimum of three years beginning after the year of compilation. See ibid. at 23-24.</ref> | Additionally, the schools must include a statement in their governing documents that it has a racially nondiscriminatory policy and the NGO must circulate information on the school’s admission policies.<ref>Ibid. Further, private schools must keep four specific types of records for a minimum of three years beginning after the year of compilation. See ibid. at 23-24.</ref> | ||
| − | ====Charitable | + | ====Charitable Organizations==== |
''Required Additional Documents and Information'' | ''Required Additional Documents and Information'' | ||
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Churches are not required to file Form 1023 to be considered tax-exempt or receive deductible contributions, but the NGO may find it advantageous.<ref>Ibid.</ref> The IRS does not define the concept of a church; it determines the classification on a case by case basis.<ref>Ibid.</ref> | Churches are not required to file Form 1023 to be considered tax-exempt or receive deductible contributions, but the NGO may find it advantageous.<ref>Ibid.</ref> The IRS does not define the concept of a church; it determines the classification on a case by case basis.<ref>Ibid.</ref> | ||
| − | =====Scientific | + | =====Scientific Foundations===== |
| − | + | ''Eligibility'' | |
| − | |||
In addition to Form 1023 and the other accompanying documents and statements, scientific foundations must show their research is “carried on in the public interest.”<ref>Ibid. at 26.</ref> The IRS considers it in the public interest if the research is publicly available, performed for a government entity, or carried on to:<ref>Ibid.</ref> | In addition to Form 1023 and the other accompanying documents and statements, scientific foundations must show their research is “carried on in the public interest.”<ref>Ibid. at 26.</ref> The IRS considers it in the public interest if the research is publicly available, performed for a government entity, or carried on to:<ref>Ibid.</ref> | ||
| − | + | *Aid in the scientific education of college students | |
| − | + | *Publish scientific information available to the public | |
| − | + | *Discover a cure for a disease | |
| − | + | *Aid a community in bringing industry development to the area. | |
| − | + | ''Required additional documents and information'' | |
If the foundation engages in scientific research, along with its application materials the NGO must submit:<ref>Ibid.</ref> | If the foundation engages in scientific research, along with its application materials the NGO must submit:<ref>Ibid.</ref> | ||
| − | + | *An explanation of its research | |
| − | + | *A description of its projects | |
| − | + | *Information on project selection | |
| − | + | *Sponsorship details, if any | |
| − | + | *The disposition of results | |
| − | + | *Information on the ownership and control of the results of the research | |
| − | + | *A copy of the NGO’s publications. | |
=====Literary organizations===== | =====Literary organizations===== | ||
Revision as of 10:14, 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).
