Difference between revisions of "How to obtain tax-exempt status"
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*#*Individuals elected by a broad base of the NGO’s [[Board Members|members]]. | *#*Individuals elected by a broad base of the NGO’s [[Board Members|members]]. | ||
#'''Availability of Public Facilities or Services Factor'''. Evidence of public support under this factor include: | #'''Availability of Public Facilities or Services Factor'''. Evidence of public support under this factor include: | ||
| − | *Whether an NGO regularly provides facilities or services to benefit the public | + | *#*Whether an NGO regularly provides facilities or services to benefit the public |
| − | + | *#*Whether an educational or research institution “regularly publishes scholarly studies” that are widely used | |
| − | + | *#*Participating or sponsoring programs by public officials or individuals with special expertise | |
| − | + | *#*Maintaining programs to accomplish charitable work in the community | |
| − | + | *#*Receiving grants from a charity or government agency. | |
| − | + | #'''Membership organizations factors'''. There are additional factors pertinent to whether a membership organization will be deemed to be publicly supported. A membership organization is publicly supported if: | |
:* its solicitation for dues is designed to enroll “a substantial number of persons;” | :* its solicitation for dues is designed to enroll “a substantial number of persons;” | ||
:* membership dues have fixed rates to ensure they are financially available to a “broad cross section” of the public; and | :* membership dues have fixed rates to ensure they are financially available to a “broad cross section” of the public; and | ||
Revision as of 08:20, 12 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).
