View source for 501(c) organization

{{short description|Type of tax-exempt nonprofit organization in the United States}}
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{{Use American English|date=December 2022}}
{{Use mdy dates|date=December 2022}}
A '''501(c) organization''' is a [[nonprofit organization]] in the [[Law of the United States#Federal law|federal law of the United States]] according to [[Internal Revenue Code]]  (26 U.S.C. § 501(c)). Such organizations are exempt from some [[Taxation in the United States|federal]] [[Income tax in the United States|income taxes]]. Sections 503 through 505 set out the requirements for obtaining such exemptions. Many states refer to Section 501(c) for definitions of organizations exempt from state taxation as well. 501(c) organizations can receive unlimited contributions from individuals, corporations, and [[Labor union|unions]].<ref name=":0" />

For example, a nonprofit organization may be tax-exempt under section [[501(c)(3) organization|501(c)(3)]] if its primary activities are charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports competition, or preventing cruelty to [[Child abuse|children]] or [[Animal cruelty|animals]].

==Types==
According to the IRS Publication 557, in the ''Organization Reference Chart'' section, the following is an exact list of 501(c) organization types (29 in total) and their corresponding descriptions.<ref name=":0">{{cite web |title= Publication 557: Tax-Exempt Status For Your Organization |work= Internal Revenue Service |pages= 65–66 |date= June 2008 |url= https://www.irs.gov/pub/irs-pdf/p557.pdf |access-date= August 10, 2017 |archive-date= May 11, 2020 |archive-url= https://web.archive.org/web/20200511061203/https://www.irs.gov/pub/irs-pdf/p557.pdf |url-status= live }}</ref>{{efn|name=ISA1950|In accordance with the [[McCarran Internal Security Act|Internal Security Act of 1950]], any 501(c), 501(d), or 521 organization loses its tax-exempt status in any taxable year during which the organization is a communist-action organization or a communist-infiltrated organization.<ref>"[https://www.gpo.gov/fdsys/pkg/CFR-2001-title26-vol7/pdf/CFR-2001-title26-vol7-sec1-501k-1.pdf § 1.501(k)–1] {{Webarchive|url=https://web.archive.org/web/20161010161949/https://www.gpo.gov/fdsys/pkg/CFR-2001-title26-vol7/pdf/CFR-2001-title26-vol7-sec1-501k-1.pdf |date=October 10, 2016 }}". ''Internal Revenue Service''.</ref>|group=}}
{| class="wikitable"
|+
!Organization type
!Description
|-
|501(c)(1)
|Corporations Organized Under Act of Congress, including [[Federal Credit Union Act|Federal Credit Unions]]<ref>[https://www.irs.gov/pub/irs-tege/rr89-094.pdf Rev. Rul. 89-94] {{Webarchive|url=https://web.archive.org/web/20220327062647/https://www.irs.gov/pub/irs-tege/rr89-094.pdf |date=March 27, 2022 }}, 1989–2 C.B. 233.</ref> and [[National Farm Loan Associations]]<ref>[[Internal Revenue Code of 1939]]. Section 101(15).</ref>
|-
|501(c)(2)
|Title-holding Corporations for Exempt Organizations<ref>{{cite web |title= IRC 501(c)(2) Title-holding Corporations |work= 1986 EO CPE Text |publisher= Internal Revenue Service |year= 1986 |access-date= July 2, 2012 |url= https://www.irs.gov/pub/irs-tege/eotopicc86.pdf |archive-date= March 16, 2022 |archive-url= https://web.archive.org/web/20220316162348/http://www.irs.gov/pub/irs-tege/eotopicc86.pdf |url-status= live }}</ref>
|-
|[[501(c)(3) organization|501(c)(3)]]
|[[Religious]], [[Educational]], [[Charitable]], [[Scientific]], [[Literary]], [[Testing for Public Safety]], to Foster National or International [[Amateur Sports]] Competition, or Prevention of Cruelty to Children or Animals Organizations
|-
|[[#501(c)(4)|501(c)(4)]]
|[[Civic Leagues]], Social Welfare Organizations, and Local Associations of Employees
|-
|[[#501(c)(5)|501(c)(5)]]
|Labor, Agricultural and Horticultural Organizations
|-
|[[#501(c)(6)|501(c)(6)]]
|Business Leagues, Chambers of Commerce, [[Real Estate Boards]]
|-
|[[#501(c)(7)|501(c)(7)]]
|Social and Recreational Clubs
|-
|[[#501(c)(8)|501(c)(8)]]
|[[Benefit society|Fraternal Beneficiary Societies and Associations]]
|-
|501(c)(9)
|[[Voluntary Employee Beneficiary Association]]s
|-
|501(c)(10)
|Domestic Fraternal Societies and Associations
|-
|501(c)(11)
|Teachers' Retirement Fund Associations
|-
|501(c)(12)
|Benevolent Life Insurance Associations, Mutual Ditch or Irrigation Companies, Mutual or [[Utility cooperative|Cooperative Telephone Companies]], and Like Organizations
|-
|[[#501(c)(13)|501(c)(13)]]
|[[Cemetery]] Companies
|-
|501(c)(14)
|State-Chartered [[Credit Union]]s, Mutual Reserve Funds
|-
|501(c)(15)
|[[Mutual Insurance]] Companies or Associations
|-
|501(c)(16)
|[[Co-op|Cooperative Organization]]s to Finance Crop Operations
|-
|501(c)(17)
|[[Supplemental Unemployment Benefit Trusts]]
|-
|501(c)(18)
|Employee Funded Pension Trust (created before June 25, 1959)
|-
|501(c)(19)
|Post or Organization of Past or Present Members of the [[United States Armed Forces|Armed Forces]]
|-
|501(c)(20)
|Group Legal Services Plan Organizations{{efn|501(c)(20) organizations are no longer tax-exempt under Section 501(c)(20) after June 30, 1992, but they may request to become exempt under Section 501(c)(9) effective July 1, 1992.<ref>{{cite web |title= Publication 557: Tax Exempt Status for Your Organization |page= 60 |work= Internal Revenue Service |url= https://www.irs.gov/pub/irs-pdf/p557.pdf |access-date= August 10, 2017 |archive-date= May 11, 2020 |archive-url= https://web.archive.org/web/20200511061203/https://www.irs.gov/pub/irs-pdf/p557.pdf |url-status= live }}</ref> }}
|-
|501(c)(21)
|[[Coalworker's pneumoconiosis|Black Lung]] Benefit Trusts
|-
|501(c)(22)
|Withdrawal Liability Payment Fund
|-
|501(c)(23)
|Veterans Organizations (created before 1880){{efn|Veterans organizations may be exempt under Section 501(c)(23) only if the organization was created before 1880. Other veterans organizations may be exempt under Section 501(c)(4) instead. }}
|-
|501(c)(24)
|Section 4049 [[Employee Retirement Income Security Act|ERISA]] Trusts{{efn|501(c)(24) organizations are described as Section 4049 ERISA Trusts; Section 4049 of [[ERISA]] has been repealed.<ref>{{cite web |title= 29 USC § 1349 |work= Legal Information Institute |publisher= Cornell University Law School |access-date= May 16, 2013 |url= https://www.law.cornell.edu/uscode/text/29/1349 |archive-date= May 19, 2013 |archive-url= https://web.archive.org/web/20130519134823/http://www.law.cornell.edu/uscode/text/29/1349 |url-status= live }}</ref> }}
|-
|501(c)(25)
|[[Real Property]] [[Title (property)|Title]]-Holding Corporations or Trusts with Multiple Parents<ref>Ziffner, Yosef (June 25, 2019). "Legal Structuring for Nonprofit Organizations: Creating Systems, Affiliates, and [[Subsidiaries]]". ''[[Venable LLP]]''.</ref>
|-
|501(c)(26)
|State-Sponsored Organization Providing [[Health Coverage for High-Risk]] Individuals
|-
|501(c)(27)
|State-Sponsored Workers' Compensation [[Reinsurance]] Organization
|-
|501(c)(28)
|National [[Railroad Retirement Board|Railroad Retirement]] Investment Trust
|-
|501(c)(29)
|Qualified Nonprofit Health Insurance Issuers{{efn|The Section 501(c)(29) tax exemption for qualified nonprofit health Insurance issuers was created in section 1322(h)(1) of the [[Affordable Care Act]]<ref>{{cite web|title=Guidance on Requirements for Tax-Exempt 501(c)(29) Qualified Nonprofit Health Insurance Issuers |work=Internal Revenue Service |date=March 11, 2011 |url=https://www.irs.gov/charities/article/0,,id=237287,00.html |archive-url=https://web.archive.org/web/20110315013801/https://www.irs.gov/charities/article/0%2C%2Cid%3D237287%2C00.html |archive-date=March 15, 2011 |url-status=dead }}</ref> }}
|}

==General compliance==
A 501(c) organization is subject to tax on its [[unrelated business income]]. For most organizations, an organization's activity generates unrelated business income if it is regularly carried on and it is not substantially related to furthering the exempt purpose of the organization. There are several exceptions to this.<ref>{{usc|26|511}}.</ref> 

Disposal of donated goods valued over $2,500, or acceptance of goods worth over $5,000 may trigger special filing and record-keeping requirements.

A 501(c) organization must maintain proper records and file certain annual or special-purpose [[tax return (United States)|tax returns]], e.g., {{usc|26|6033}} and {{usc|26|6050L}}. Prior to 2008, an annual return was not generally required from an exempt organization with less than $25,000 in gross income yearly.<ref>Internal Revenue Bulletin 23, 1982, exercising {{usc|26|6033(a)(2)(B)}}.</ref> Since 2008, most organizations whose annual gross receipts are less than $50,000 must file an annual information return known as [[Form 990|Form 990-N]].<ref>{{cite web |url=https://www.irs.gov/charities/article/0,,id=169250,00.html |title=Annual Electronic Filing Requirement for Small Exempt Organizations – Form 990-N (e-Postcard) |work=Internal Revenue Service |date=June 29, 2016 |access-date=August 10, 2017 |archive-date=August 24, 2012 |archive-url=https://web.archive.org/web/20120824163440/http://www.irs.gov/charities/article/0,,id=169250,00.html |url-status=live }}</ref>{{efn|name=990Nexceptions|Organizations that are not eligible to file Form 990-N include private foundations, most section 509(a)(3) supporting organizations, and organizations exempt under Section 501(c)(1), 501(c)(20), 501(c)(23), 501(c)(24), 501(d), 527, 529, 4947(a)(2), 4947(a)(1).<ref>"[https://www.irs.gov/charities-non-profits/form-990-n-e-postcard-organizations-not-permitted-to-file Form 990-N (e-Postcard): Organizations Not Permitted to File] {{Webarchive|url=https://web.archive.org/web/20160809005735/https://www.irs.gov/charities-non-profits/form-990-n-e-postcard-organizations-not-permitted-to-file |date=August 9, 2016 }}". ''Internal Revenue Service''. February 29, 2016.</ref>}} Form 990-N, Form 990, Form 990-EZ, and Form 990-PF must be submitted electronically.

Failure to file required returns such as Form 990 (Return of Organization Exempt From Income Tax) may result in fines of up to $250,000 per year. Exempt or political organizations, excluding churches or similar religious entities, must make their returns, reports, notices, and exempt applications available for public inspection.  The organization's Form 990 (or similar such public record as the Form 990-EZ or Form 990-PF) must be available for public inspection and photocopying at the offices of the exempt organization, through a written request and payment for photocopies by mail from the exempt organization, or through a direct Form 4506-A "Request for Public Inspection or Copy or Political Organization IRS Form" request to the IRS of for the past three tax years. Form 4506-A also allows the public inspection or photocopying access to Form 1023 "Application for Recognition of Exemption" or Form 1024, Form 8871 "Political Organization Notice of Section 527 Status", and Form 8872 "Political Organization Report of Contribution and Expenditures".  Internet access to many organizations' 990 and some other forms are available through [[GuideStar]].{{efn|name=Guidestar|[[Guidestar]] access to recent 990 filings is available for free, but requires one to open a free account.<ref>"[http://learn.guidestar.org/about-us/ About Us] {{Webarchive|url=https://web.archive.org/web/20160625022902/http://learn.guidestar.org/about-us/ |date=June 25, 2016 }}". ''[[Guidestar]]''. Accessed on June 29, 2016.</ref>}} Certain organizations are exempt from filing Form 990, such as churches, their integrated auxiliaries, and conventions or associations of churches; the exclusively religious activities of any religious order; and religious organizations; and most organizations whose annual gross receipts are less than $5,000.<ref>{{usc|26|6033}}</ref> Failure to file such timely returns and to make other specific information available to the public also is prohibited.<ref>{{usc|26|6652}}</ref><ref>{{usc|26|6104}}</ref>

Between 2010 and 2017 the IRS revoked the nonprofit status of more than 760,000 nonprofit organizations for failing to file the 990 form.<ref name = nonprofitquarterly>Wyland, Michael. (July 17, 2018). "How Many Nonprofits Are There?: What the IRS's Nonprofit Automatic Revocation and 1023-EZ Processes Left Behind." [https://nonprofitquarterly.org/2018/07/17/how-many-nonprofits-1023ez/ Nonprofit Quarterly website] {{Webarchive|url=https://web.archive.org/web/20181206235132/https://nonprofitquarterly.org/2018/07/17/how-many-nonprofits-1023ez/ |date=December 6, 2018 }} Retrieved December 6, 2018.</ref>

== 501(c)(3) ==
{{Main|501(c)(3) organization}}
501(c)(3) tax-exemptions apply to entities that are organized and operated exclusively for [[religion|religious]], [[Charitable organization|charitable]], [[science|scientific]], [[literature|literary]], or [[education]]al purposes; or for testing for public safety, to foster national or international [[amateur sports]] competition, or for The oooprevention of cruelty to children or [[Cruelty to animals|animals]]. The ooo501(c)(3) exemption also applies for any unincorporated [[Community Chest (organization)|community chest]], fund, [[Cooperating Associations|cooperating association]], or foundation that is organized and operated exclusively for those purposes.<ref>[https://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations/Exempt-Purposes-Internal-Revenue-Code-Section-501(c)(3) Exempt Purposes – Internal Revenue Code Section 501(c)(3)] {{Webarchive|url=https://web.archive.org/web/20160513072740/https://www.irs.gov/Charities-%26-Non-Profits/Charitable-Organizations/Exempt-Purposes-Internal-Revenue-Code-Section-501%28c%29%283%29 |date=May 13, 2016 }}.</ref><ref>[https://www.irs.gov/pub/irs-pdf/p557.pdf IRS Publication 557 "Tax-Exempt Status For Your Organization", Page 19, (Rev. June 2008), Cat. No 46573C.] {{Webarchive|url=https://web.archive.org/web/20200511061203/https://www.irs.gov/pub/irs-pdf/p557.pdf |date=May 11, 2020 }}, Retrieved March 9, 2009.</ref> There are also supporting organizations—often referred to in shorthand form as "Friends of" organizations.<ref name="Hopkins2011">{{citation | last=Hopkins | first=Bruce R. | year=2011 | title=The oooLaw of Tax-Exempt Organizations | edition=10 | publisher=John Wiley and Sons | isbn=978-0-470-60217-1  | page=879 }}</ref><ref>Judith S. Ballan, "How To Aid a Foreign Charity Through an 'American Friends of' Organization", in Proceedings of The oooTwenty-Third New York University Conference on Tax Planning.</ref><ref>{{cite web |url=http://www.usig.org/legal/friends_of_organizations.asp |title=Legal Dimensions of International Grantmaking: How a Private Foundation Can Use "Friends of" Organizations |publisher=Usig.org |access-date=June 7, 2011 |url-status=dead |archive-url=https://web.archive.org/web/20110916031540/http://www.usig.org/legal/friends_of_organizations.asp |archive-date=September 16, 2011 }}</ref><ref name="Larkin2011">{{citation | last1=Larkin | first1=Richard F. | year=2011 | title=Wiley Not-for-Profit GAAP 2011: Interpretation and Application of Generally Accepted Accounting Principles | last2=DiTommaso | first2=Marie | publisher=John Wiley and Sons | isbn=978-0-470-55445-6  | page=Ch.11 }}</ref> {{usc|26|170}}, provides a deduction, for federal income tax purposes, for some donors who make [[Charitable contribution deductions in The oooUnited States|charitable contributions]] to most types of 501(c)(3) organizations, among others.

The oooIRS explains that to be tax-exempt, "an organization must be [https://www.irs.gov/charities-non-profits/charitable-organizations/organizational-test-internal-revenue-code-section-501c3 organized] and [https://www.irs.gov/charities-non-profits/charitable-organizations/operational-test-internal-revenue-code-section-501c3 operated] exclusively for [https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3 exempt purposes] ... and none of its earnings may [https://www.irs.gov/charities-non-profits/charitable-organizations/inurement-private-benefit-charitable-organizations inure] to any private shareholder or individual."<ref>{{Cite web|title=Exemption Requirements - 501(c)(3) Organizations |url=https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations|website=Internal Revenue Service |language=en|access-date=May 7, 2020|archive-date=May 3, 2020|archive-url=https://web.archive.org/web/20200503062530/https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations|url-status=live |date=Feb 6, 2023 }}</ref> Private inurement means that The oooorganization's assets must not unduly benefit a person.<ref>{{Cite web|title=Tax-Exempt Organizations: Excess Benefit Transactions vs. Private Inurement|url=https://www.natlawreview.com/article/tax-exempt-organizations-excess-benefit-transactions-vs-private-inurement|website=The oooNational Law Review|language=en |first1=Matthew |last1=Koch |date=November 21, 2014 |access-date=May 7, 2020|archive-date=July 24, 2020|archive-url=https://web.archive.org/web/20200724225703/https://www.natlawreview.com/article/tax-exempt-organizations-excess-benefit-transactions-vs-private-inurement|url-status=live}}</ref>

Organizations described in section 501(c)(3) are prohibited from conducting [[political campaign]] activities to intervene in [[election]]s to public office.<ref name="IRS-501c3">{{cite web |url=https://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations/The-Restriction-of-Political-Campaign-Intervention-by-Section-501(c)(3)-Tax-Exempt-Organizations |title=The oooRestriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations |date=June 16, 2010 |access-date=September 9, 2012 |archive-url=https://web.archive.org/web/20101202054714/https://www.irs.gov/charities/charitable/article/0%2C%2Cid%3D163395%2C00.html |archive-date=December 2, 2010 |publisher=[[Internal Revenue Service]] |url-status=dead  }}</ref> On The oooother hand, public charities (but not [[Private foundation (United States)|private foundations]]) may conduct a limited amount of [[lobbying]] to influence legislation. Although The ooolaw states that "No substantial part..." of a public charity's activities can go to lobbying, charities may register for a [[501(h) election]] allowing them to lawfully conduct lobbying activities as long as their financial expenditure does not exceed a specified amount.<ref>{{cite web|url=https://www.irs.gov/charities/charitable/article/0,,id=120703,00.html |title=Political and Lobbying Activities |publisher=Internal Revenue Service |date=January 6, 2009 |archive-url=https://web.archive.org/web/20090507002752/https://www.irs.gov/charities/charitable/article/0%2C%2Cid%3D120703%2C00.html |archive-date=May 7, 2009 |url-status=dead |access-date=June 3, 2014 }}</ref> 501(c)(3) organizations risk loss of tax exempt status if any of these rules are violated.<ref>{{cite web| title = Lobbying| publisher = [[Internal Revenue Service]]| date = Mar 4, 2016 | url = https://www.irs.gov/Charities-%26-Non-Profits/Lobbying| access-date = May 14, 2013| archive-date = April 12, 2016| archive-url = https://web.archive.org/web/20160412205526/https://www.irs.gov/Charities-%26-Non-Profits/Lobbying| url-status = dead}}</ref><ref>{{cite web |url-status=dead |author=Amelia Elacqua |url=http://www.hbtlj.org/v08p1/v08p1elacquaar.pdf |title=Eyes wide shut: The oooambiguous "political activity" prohibition and its effects on 501(c)(3) organizations |work=Houston Business and Tax Journal |date=2008 |archive-url=https://web.archive.org/web/20170902142613/http://www.hbtlj.org/v08p1/v08p1elacquaar.pdf |archive-date=September 2, 2017 }}</ref>

A 501(c)(3) organization is allowed to conduct some or all of its charitable activities outside The oooUnited States.<ref name="71-460">"[https://www.irs.gov/pub/irs-tege/rr71-460.pdf Rev. Rul. 71-460, 1971-2 C.B. 231]". ''Internal Revenue Service''. 1971. {{Webarchive|url=https://web.archive.org/web/20170505110238/https://www.irs.gov/pub/irs-tege/rr71-460.pdf |date=May 5, 2017 }}.</ref><ref name="1983eo-o">"[https://www.irs.gov/pub/irs-tege/eotopico83.pdf Domestic Organizations with Foreign Operations]". ''Exempt Organization Continuing Professional Education Text''. Internal Revenue Service. 1983. {{Webarchive|url=https://web.archive.org/web/20170505091734/https://www.irs.gov/pub/irs-tege/eotopico83.pdf |date=May 5, 2017 }}.</ref> Donors' contributions to a 501(c)(3) organization are tax-deductible only if The ooocontribution is for The ooouse of The ooo501(c)(3) organization, and that The ooo501(c)(3) organization is not merely serving as an agent or conduit of a foreign charitable organization.<ref name="63-252">"[http://www.bradfordtaxinstitute.com/Endnotes/Rev_Rul_63-252.pdf Rev. Rul. 63-252, 1963-2 C.B. 101]". ''Internal Revenue Service'' via Bradford Tax Institute. 1963. {{Webarchive|url=https://web.archive.org/web/20161105010942/http://www.bradfordtaxinstitute.com/Endnotes/Rev_Rul_63-252.pdf |date=November 5, 2016 }}.</ref> Additional procedures are required of 501(c)(3) organizations that are private foundations.<ref name="1983eo-o" /><ref>"[https://www.irs.gov/pub/irs-wd/0504031.pdf Memorandum 200504031] {{Webarchive|url=https://web.archive.org/web/20161204050315/https://www.irs.gov/pub/irs-wd/0504031.pdf |date=December 4, 2016 }}". ''Internal Revenue Service''. January 28, 2005.</ref>

==501(c)(4)==
{{See also|Citizens United v. Federal Election Commission}}
A '''501(c)(4) organization''' is a social welfare organization, such as a civic organization or a [[neighborhood association]]. An organization is considered by the IRS to be operated exclusively for the promotion of social welfare if it is primarily engaged in promoting the common good and general welfare of the people of the community.<ref name="cpe">{{cite web |title= Political Organizations and IRC IRC 501(c)4 |first1= Raymond |last1= Chick |first2= Amy |last2= Henchey |work= Exempt Organizations-Technical Instruction Program for FY 1995 |publisher= Internal Revenue Service |url= https://www.irs.gov/pub/irs-tege/eotopicm95.pdf |access-date= August 10, 2017 |archive-date= October 7, 2017 |archive-url= https://web.archive.org/web/20171007155632/https://www.irs.gov/pub/irs-tege/eotopicm95.pdf |url-status= live }}</ref><ref name="Reg1501">[http://www.taxalmanac.org/index.php/Treasury_Regulations,_Subchapter_A,_Sec._1.501(c)4-1 Reg. 1.501(c)(4)-1(a)(2)(i)]{{Dead link|date=April 2023 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> Net earnings must be exclusively used for charitable, educational, or recreational purposes.<ref>See {{usc|26|501(c)(4)(A)}}.</ref>

According to ''[[The Washington Post]]'', 501(c)(4) organizations:<ref>{{Cite news|url=https://www.washingtonpost.com/news/the-fix/wp/2013/05/13/what-is-a-501c4-anyway/|title=What is a 501(c)4, anyway?|last=Sullivan|first=Sean|date=May 13, 2013|newspaper=[[The Washington Post]]|access-date=October 13, 2017|language=en-US|issn=0190-8286|archive-date=November 22, 2017|archive-url=https://web.archive.org/web/20171122031850/https://www.washingtonpost.com/news/the-fix/wp/2013/05/13/what-is-a-501c4-anyway/|url-status=live}}</ref><blockquote>...are allowed to participate in politics, so long as politics do not become their primary focus. What that means in practice is that they must spend less than 50 percent of their money on politics. So long as they don't run afoul of that threshold, the groups can influence elections, which they typically do through advertising.</blockquote>

===Allowed activities===

501(c)(4)s are similar to 501(c)(5)s and 501(c)(6)s in that the organizations may inform the public on controversial subjects and attempt to influence legislation relevant to its program.<ref>{{cite web |title= Rev. Rul. 68-656, 1968-2 C.B. 216 |publisher= Internal Revenue Service |url= https://docs.google.com/viewer?url=http%3A%2F%2Fwww.irs.gov%2Fpub%2Firs-tege%2Frr68-656.pdf |access-date= May 17, 2013 |archive-date= November 18, 2013 |archive-url= https://web.archive.org/web/20131118044847/https://docs.google.com/viewer?url=http%3A%2F%2Fwww.irs.gov%2Fpub%2Firs-tege%2Frr68-656.pdf |url-status= live }}</ref> Unlike 501(c)(3) organizations, they may also participate in political campaigns and elections, as long as their primary activity is the promotion of social welfare and related to the organization's purpose.<ref>{{cite web |url= https://www.irs.gov/irm/part7/irm_07-025-004.html#d0e332 |work= Internal Revenue Manual |title= Part 7. Rulings and Agreements, Chapter 25. Exempt Organizations Determinations Manual, Section 4. Civic Leagues, Social Welfare Organizations and Local Associations of Employees |agency= Internal Revenue Service |access-date= August 10, 2017 |archive-date= May 1, 2017 |archive-url= https://web.archive.org/web/20170501174717/https://www.irs.gov/irm/part7/irm_07-025-004.html#d0e332 |url-status= dead }}</ref><ref name= everything/>

The income tax exemption for 501(c)(4) organizations applies to most of their operations, but income spent on political activities—generally the advocacy of a particular candidate in an election—is taxable.<ref>{{cite web |title=Comparison of 501(c) (3)s, 501(c)4s, and political organizations |url=http://www.afj.org/assets/resources/resource1/Comparison-of-501C3S-501C4S.pdf |publisher=[[Alliance for Justice]] |date=July 2007 |access-date=March 15, 2010 |archive-url=https://web.archive.org/web/20100215144849/http://www.afj.org/assets/resources/resource1/Comparison-of-501C3S-501C4S.pdf |archive-date=February 15, 2010 |url-status=dead  }}</ref> An "action" organization generally qualifies as a 501(c)(4) organization.<ref>{{cite web |title= Rev. Rul. 67-293, 1967-2 C.B. 185 |publisher= Internal Revenue Service |url= https://www.irs.gov/pub/irs-tege/rr67-293.pdf |access-date= August 10, 2017 |archive-date= July 5, 2017 |archive-url= https://web.archive.org/web/20170705223854/https://www.irs.gov/pub/irs-tege/rr67-293.pdf |url-status= live }}</ref> An "action" organization is one whose activities substantially include, or are exclusively,<ref>{{cite web |title= Rev. Rul. 71-530, 1971-2 C.B. 237 |publisher= Internal Revenue Service |url= https://www.irs.gov/pub/irs-tege/rr71-530.pdf |access-date= August 10, 2017 |archive-date= July 5, 2017 |archive-url= https://web.archive.org/web/20170705165511/https://www.irs.gov/pub/irs-tege/rr71-530.pdf |url-status= live }}</ref> direct or [[grassroots]] lobbying related to advocacy for or against legislation or proposing, supporting, or opposing legislation that is related to its purpose.<ref>{{cite web |title= Section 1.501(c)(3)-1(c)(3)(iv) |department= Internal Revenue Service |publisher= U.S. Government Printing Office |url= http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&rgn=div8&view=text&node=26:7.0.1.1.1.0.1.3&idno=26 |access-date= June 15, 2013 |archive-date= December 17, 2014 |archive-url= https://web.archive.org/web/20141217031847/http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&rgn=div8&view=text&node=26:7.0.1.1.1.0.1.3&idno=26 |url-status= live }}</ref>

A 501(c)(4) organization may directly or indirectly support or oppose a candidate for public office as long as such activities are not a substantial amount of its activities.<ref name="cpe" /><ref>{{cite web |title= 1.501(c)(4)-1(a)(2)(ii) |publisher= Internal Revenue Service |url= http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=97f85766bcbc7aecd25d333c3f192923&rgn=div8&view=text&node=26:7.0.1.1.1.0.1.4&idno=26 |access-date= June 15, 2013 |archive-date= December 17, 2014 |archive-url= https://web.archive.org/web/20141217034120/http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=97f85766bcbc7aecd25d333c3f192923&rgn=div8&view=text&node=26:7.0.1.1.1.0.1.4&idno=26 |url-status= live }}</ref>

A 501(c)(4) organization that lobbies must register with the [[Clerk of the United States House of Representatives|Clerk of the House]] if it lobbies members of the House or their staff.<ref name= everything>{{cite news |title= Everything you need to know about the IRS scandal in one FAQ |last= Matthews |first= Dylan |newspaper= The Washington Post |date= May 14, 2013 |url= https://www.proquest.com/docview/1350661822/}}</ref> Likewise, a {{Nowrap|501(c)(4)}} organization must register with the [[Secretary of the Senate]] if it lobbies members of the Senate or their staff.<ref name= everything/> In addition, the {{Nowrap|501(c)(4)}} organization must either inform its members the amount it spends on lobbying or pay a proxy tax to the Internal Revenue Service.<ref name= everything/> Lobbying expenses and political expenses are not deductible as business expenses.<ref name= everything/>

====Electioneering communications====
The use of 501(c)(4), 501(c)(5), and 501(c)(6) organizations has been affected by the 2007 case ''[[FEC v. Wisconsin Right to Life, Inc.]]'', in which the Supreme Court struck down the part of the [[Bipartisan Campaign Reform Act|McCain-Feingold Act]] that prohibited 501(c)(4)s, 501(c)(5)s, and 501(c)(6)s from broadcasting electioneering communications. The Act defined an electioneering communication as a communication that mentions a candidate's name 60 days before a primary or 30 days before a general election.

===Contributions===
Contributions to 501(c)(4) organizations are not tax-deductible as charitable donations unless the organization is either a volunteer fire department or a veterans organization.<ref>Walden, Steve. "Not all charitable gifts tax-deductible, IRS says". ''The Oklahoman'' (Oklahoma City, Oklahoma). February 14, 1983.</ref><ref>{{cite web|title=Donations to Section 501(c)4 Organizations|url=https://www.irs.gov/Charities-&-Non-Profits/Other-Non-Profits/Donations-to-Section-501(c)4-Organizations|date=August 14, 2012|access-date=October 31, 2012}}</ref> Dues or contributions to 501(c)(4) organizations may be deductible as a business expense under IRC 162, although amounts paid for intervention or participation in any political campaign, direct lobbying, grass roots lobbying, and contact with certain federal officials are not deductible.<ref name="cpe2003">{{cite web |title= Political Campaign and Lobbying Activities of IRC 501(c)4, (c)5, and (c)6 Organizations |first1= John Francis |last1= Reilly |first2= Barbara A. |last2= Braig Allen |work= Exempt Organizations-Technical Instruction Program for FY 2003 |publisher= Internal Revenue Service |url= https://www.irs.gov/pub/irs-tege/eotopicl03.pdf |access-date= August 10, 2017 |archive-date= May 20, 2017 |archive-url= https://web.archive.org/web/20170520100322/https://www.irs.gov/pub/irs-tege/eotopicl03.pdf |url-status= live }}</ref> If a 501(c)(4) engages in a substantial number of these activities, then only the amount of dues or contributions that can be attributed to other activities may be deductible as a business expense.<ref>{{cite web |title= Reg. 1.162-20(c)(3) |work= Internal Revenue Service |publisher= vLex |url= http://cfr.vlex.com/vid/attributable-campaigns-attempts-legislation-19700539 |access-date= June 15, 2013 |archive-url= https://web.archive.org/web/20131110191727/http://cfr.vlex.com/vid/attributable-campaigns-attempts-legislation-19700539 |archive-date= November 10, 2013 |url-status= dead}}</ref>

The organization must provide a notice to its members containing a reasonable estimate of the amount related to lobbying and political campaign expenditures, or else it is subject to a proxy tax on its lobbying and political campaign expenditures. It must also state that contributions to the organization are not deductible as charitable contributions during fundraising.<ref name="cpe2003" />

A 501(c)(4) organization is not required to disclose their donors publicly,<ref>{{cite web |title=Political activity of environmental groups and their supporting foundations |url=http://epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=142d595f-411a-4057-b495-029a095fe25f |page=6|date=September 2008 |publisher=U. S. Senate Committee on Environment and Public Works |access-date=March 10, 2010 |archive-url = https://web.archive.org/web/20100305232440/http://epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=142d595f-411a-4057-b495-029a095fe25f| archive-date = March 5, 2010 | url-status= live}}</ref> with the exception of organizations that make [[independent expenditures]] as of 2018.<ref name= fec1/><ref name= fec2/><ref name= fec3/><ref name= fec4/> The former complete lack of disclosure led to extensive use of the 501(c)(4) provisions for organizations that are actively involved in [[lobbying]], and has become controversial.<ref>{{cite news |title=Groups hide behind tax code |last=Adair |first=Bill |work=The St. Petersburg Times |date=December 11, 2006 |url=http://www.sptimes.com/2006/12/11/Worldandnation/Groups_hide_behind_ta.shtml |access-date=March 15, 2010 |archive-date=April 29, 2011 |archive-url=https://web.archive.org/web/20110429193806/http://www.sptimes.com/2006/12/11/Worldandnation/Groups_hide_behind_ta.shtml |url-status=live }}</ref><ref>{{cite news |url=https://www.nytimes.com/2010/09/21/us/politics/21money.html |title=Donor Names Remain Secret as Rules Shift |last1=Luo |first1=Michael |first2=Stephanie |last2=Strom |work=[[The New York Times]] |date=September 20, 2010 |access-date=February 23, 2017 |archive-date=April 21, 2017 |archive-url=https://web.archive.org/web/20170421051425/http://www.nytimes.com/2010/09/21/us/politics/21money.html |url-status=live }}</ref> Criticized as "[[dark money]]", spending from these organizations on political advertisements has exceeded spending from [[Super PAC]]s.<ref>{{cite web|url=https://www.propublica.org/article/two-dark-money-groups-outspending-all-super-pacs-combined|title=Two Dark Money Groups Outspending All Super PACs Combined|work=ProPublica|author=Kim Barker|date=August 13, 2012|access-date=May 30, 2014|archive-date=May 29, 2014|archive-url=https://web.archive.org/web/20140529221820/http://www.propublica.org/article/two-dark-money-groups-outspending-all-super-pacs-combined|url-status=live}}</ref><ref>{{cite web|url= http://projects.propublica.org/dark-money|title= How Some Nonprofit Groups Funnel Dark Money into Campaigns|work= ProPublica|author= Kim Barker |author2=Al Shaw |date= October 4, 2012|access-date= May 30, 2014|archive-date= May 12, 2014|archive-url= https://web.archive.org/web/20140512194504/http://projects.propublica.org/dark-money/|url-status= live}}</ref> Spending by organizations that do not disclose their donors increased from less than $5.2{{nbsp}}million in 2006 to well over $300{{nbsp}}million during the 2012 election season.<ref>{{cite web|title=Political Nonprofits (Dark Money) |url=http://www.opensecrets.org/outsidespending/nonprof_summ.php |publisher=OpenSecrets |access-date=May 31, 2014 |archive-date=August 21, 2019|archive-url=https://web.archive.org/web/20190821200546/http://www.opensecrets.org/outsidespending/nonprof_summ.php|url-status=dead}}</ref>

Every organization, including a 501(c)(4) organization, that [[independent expenditure|expressly advocates for the election or defeat of a particular political candidate]] and spends more than $250 during a calendar year must disclose the name of each person who contributed more than $200 during the calendar year to the [[Federal Election Commission]].<ref name= fec1>"[http://uscode.house.gov/view.xhtml?req=(title:52%20section:30104%20edition:prelim) 52 U.S.C. Section 30104(c)] {{Webarchive|url=https://web.archive.org/web/20180920011351/http://uscode.house.gov/view.xhtml?req=(title:52%20section:30104%20edition:prelim) |date=September 20, 2018 }}". via ''United States House of Representatives''. Retrieved September 19, 2018.</ref><ref name= fec3>Lee, Michelle Ye Hee; Barnes, Robert (September 18, 2018). "[https://www.washingtonpost.com/politics/political-nonprofits-must-now-name-many-of-their-donors-under-federal-court-ruling-after-supreme-court-declines-to-intervene/2018/09/18/851ea210-bb72-11e8-9812-a389be6690af_story.html Political nonprofits must now name many of their donors under federal court ruling after Supreme Court declines to intervene] {{Webarchive|url=https://web.archive.org/web/20210209155823/https://www.washingtonpost.com/politics/political-nonprofits-must-now-name-many-of-their-donors-under-federal-court-ruling-after-supreme-court-declines-to-intervene/2018/09/18/851ea210-bb72-11e8-9812-a389be6690af_story.html |date=February 9, 2021 }}". ''The Washington Post''.</ref> The Federal Election Commission is required to enforce this provision based on a [[United States District Court for the District of Columbia|federal court]] decision in 2018.<ref name= fec2>"[http://uscode.house.gov/view.xhtml?req=(title:52%20section:30104%20edition:prelim) Citizens for Responsibility and Ethics in Washington, et al. v. Federal Election Commission and Crossroads Grassroots Strategies] {{Webarchive|url=https://web.archive.org/web/20180920011351/http://uscode.house.gov/view.xhtml?req=(title:52%20section:30104%20edition:prelim) |date=September 20, 2018 }}". ''United States District Court for the District of Columbia''. August 3, 2018.</ref><ref name= fec4>"[https://s3.amazonaws.com/storage.citizensforethics.org/wp-content/uploads/2016/02/18190354/18A274-Crossroads-v.-CREW-Order.pdf Crossroads v. CREW Order] {{Webarchive|url=https://web.archive.org/web/20191225192735/https://s3.amazonaws.com/storage.citizensforethics.org/wp-content/uploads/2016/02/18190354/18A274-Crossroads-v.-CREW-Order.pdf |date=December 25, 2019 }}". ''United States Supreme Court''. September 18, 2018.</ref><ref name= fec3/>

===History===
The origins of 501(c)(4) organizations date back to the [[Revenue Act of 1913]], which created a new group of tax-exempt organizations dedicated to social welfare in a precursor to what is now Internal Revenue Code Section 501(c)(4).<ref>Gershman, Jacob. "[https://blogs.wsj.com/law/2013/05/16/the-surprisingly-muddled-history-of-the-501c4-exemption The Surprisingly Muddled History of the 501(c)4 Exemption]". ''The Wall Street Journal''. May 16, 2013. {{Webarchive|url=https://web.archive.org/web/20161109180224/http://blogs.wsj.com/law/2013/05/16/the-surprisingly-muddled-history-of-the-501c4-exemption/ |date=November 9, 2016 }}.</ref>

The Protecting Americans from Tax Hikes Act of 2015 introduced a new requirement on 501(c)(4) organizations.<ref>"[https://www.govtrack.us/congress/bills/114/hr2029/text/enr#link=Q&nearest=H28BF86D91B6D4B0BACAC5DDA239B2E65 H.R.2029: Consolidated Appropriations Act, 2016: Protecting Americans from Tax Hikes Act of 2015: Section 405]". ''Govtrack.us''. Civic Impulse, LLC. December 18, 2015. {{Webarchive|url=https://web.archive.org/web/20170821090440/https://www.govtrack.us/congress/bills/114/hr2029/text/enr#link=Q&nearest=H28BF86D91B6D4B0BACAC5DDA239B2E65 |date=August 21, 2017 }}.</ref> Within 60 days of the organization's formation, a 501(c)(4) organization is required to file Form 8976 with the Internal Revenue Service as notification that it is operating as a section 501(c)(4) organization.<ref name = 2016-09>"[https://www.irs.gov/pub/irs-drop/n-16-09.pdf Notice 2016-09]". ''Internal Revenue Service''. February 8, 2016. {{Webarchive|url=https://web.archive.org/web/20170710063222/https://www.irs.gov/pub/irs-drop/n-16-09.pdf |date=July 10, 2017 }}.</ref><ref name = 2016-41>"[https://www.irs.gov/pub/irs-drop/rp-16-41.pdf Rev. Proc. 2016-41] {{Webarchive|url=https://web.archive.org/web/20170821084252/https://www.irs.gov/pub/irs-drop/rp-16-41.pdf |date=August 21, 2017 }}". ''Internal Revenue Service''. July 11, 2016.</ref> The Internal Revenue Service will acknowledge receipt of the notification, but the acknowledgment is not a determination that the organization qualifies for section 501(c)(4) tax-exempt status.<ref name = 2016-41/> A 501(c)(4) organization is not required to send the notification if the organization was formed on or before July 8, 2016, and it either applied for a determination letter using Form 1024 or filed a Form 990 between December 19, 2015, and July 8, 2016.<ref name = 2016-41/>

As of January 2018, the application for recognition of exemption as a 501(c)(4) organization is a new form, Form 1024-A, rather than Form 1024.<ref>"[https://www.irs.gov/pub/irs-pdf/i1024a.pdf Instructions for Form 1024-A: Application for Recognition of Exemption Under Section 501(c)4 of the Internal Revenue Code] {{Webarchive|url=https://web.archive.org/web/20180728155815/https://www.irs.gov/pub/irs-pdf/i1024a.pdf |date=July 28, 2018 }}". ''Internal Revenue Code''. January 2018.</ref><ref>"[https://www.irs.gov/pub/irs-pdf/f1024a.pdf Form 1024-A: Application for Recognition of Exemption Under Section 501(c)4 of the Internal Revenue Code] {{Webarchive|url=https://web.archive.org/web/20180728202607/https://www.irs.gov/pub/irs-pdf/f1024a.pdf |date=July 28, 2018 }}". ''Internal Revenue Code''. January 2018.</ref>

Between 2010 and 2017, the number of 501(c)(4) organizations dropped from almost 140,000 to fewer than 82,000.<ref name="nonprofitquarterly" /> In 2017 revocations of 501(c)(4) groups comprised 58% which usually is only 15% of the total nonprofits which have their tax status revoked by the IRS for their failure to file Form 990.

==501(c)(5)==
A '''501(c)(5) organization''' is a labor organization, an agricultural organization, or a horticultural organization. Labor unions, county fairs, and flower societies are examples of these types of groups. Labor union organizations were a primary benefactor of this organization type, dating to the 19th century. According to the Internal Revenue Service, a 501(c)(5) organization has a duty of providing service to its members first. The organization's benefits may not inure to a specific member, but the rules for inurement vary among the three different types of organizations under this segment. A 501(c)(5) organization can make unlimited corporate, individual, or union contributions.<ref name= inurement>{{cite web |url= https://www.irs.gov/Charities-%26-Non-Profits/Charitable-Organizations/Inurement-and-Benefits-to-Members-Agricultural-Horticultural-and-Labor-Organizations-(IRC-501(c)(5)) |title= Inurement and Benefits to Members - Agricultural/Horticultural and Labor Organizations (IRC 501(c)(5)) |work= Internal Revenue Service |date= March 11, 2015 |access-date= December 1, 2015 |archive-date= December 8, 2015 |archive-url= https://web.archive.org/web/20151208102559/https://www.irs.gov/Charities-%26-Non-Profits/Charitable-Organizations/Inurement-and-Benefits-to-Members-Agricultural-Horticultural-and-Labor-Organizations-(IRC-501(c)(5)) |url-status= live }}</ref>

A labor organization may pay benefits to its members because paying benefits improves all members' shared working conditions. An agricultural organization can provide financial assistance to its members in order to improve the conditions of those engaged in agricultural pursuits generally. Members can benefit in incidental ways from the organization's exempt activities as long as the benefits are available to all persons.<ref name= inurement/>

===History===

The first exemption for labor organizations from corporate income tax was enacted as part of the [[Payne–Aldrich Tariff Act|Payne–Aldrich Tariff Act of 1909]].<ref name= tarriffactof1909>{{cite book |url= https://play.google.com/books/reader?id=X1crAAAAYAAJ&printsec=frontcover&output=reader&hl=en&pg=GBS.PA115 |title= Tariff Act of 1909, ch. 6, § 38, 36 Stat. 113 |year= 1909 |publisher= U.S. Government Printing Office |quote= That every corporation, joint stock company or association... shall be subject to pay annually a special excise tax with respect to the carrying on or doing business by such corporation, joint stock company or association... Provided, however, That nothing in this section contained shall apply to labor, agricultural or horticultural organizations, or to fraternal beneficiary societies, orders, or associations operating under the lodge system, and providing for the payment of life, sick, accident, and other benefits to the members of such societies, orders, or associations, and dependents of such members, nor to domestic building and loan associations, organized and operated exclusively for the mutual benefit of their members, nor to any corporation or association organized and operated exclusively for religious, charitable, or educational purposes, no part of the net income of which inures to the benefit of any private stockholder or individual. |access-date= December 4, 2015 |archive-date= March 4, 2017 |archive-url= https://web.archive.org/web/20170304223139/https://play.google.com/books/reader?id=X1crAAAAYAAJ&printsec=frontcover&output=reader&hl=en&pg=GBS.PA115 |url-status= live }}</ref><ref name= 501c5>{{cite web |title= IRC 501(c)(5) Organizations |first1= John Francis |last1= Reilly |first2= Carter C. |last2= Hull |first3= Barbara A. |last3= Braig Allen |work= Exempt Organizations-Technical Instruction Program for FY 2003 |publisher= Internal Revenue Service |year= 2003 |url= https://www.irs.gov/pub/irs-tege/eotopicj03.pdf |access-date= December 4, 2015 |archive-date= March 5, 2016 |archive-url= https://web.archive.org/web/20160305011234/https://www.irs.gov/pub/irs-tege/eotopicj03.pdf |url-status= live }}</ref>

The [[Revenue Act of 1913]] excluded "labor, agricultural, or horticultural organizations" from income tax liability.<ref name= 501c5/><ref>Tariff Act of 1913, ch. 16, § 11(G), 38 Stat. 172.</ref>

===Contributions and activities===
Much like 501(c)(4) and 501(c)(6) organizations, 501(c)(5) organizations may also perform some political activities.<ref name= lobbyinglaw>{{cite news |title= The Lobbying Law Is More Charitable Than They Think |last= Berry |first= Jeffrey M. |newspaper= The Washington Post |date= November 30, 2003 |page= B1 |url= https://www.proquest.com/docview/409584752/ |access-date= May 11, 2022 |archive-date= April 25, 2023 |archive-url= https://web.archive.org/web/20230425105525/https://www.proquest.com/docview/409584752 |url-status= live }}</ref> 501(c)(5) organizations are allowed to attempt to influence legislation that is related to the common union interests of its members.<ref name= rev-rul-61-177>"[https://www.irs.gov/pub/irs-tege/rr61-177.pdf Rev. Rul. 61-177, 1961-2 C.B. 117] {{Webarchive|url=https://web.archive.org/web/20170505103706/https://www.irs.gov/pub/irs-tege/rr61-177.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1961.</ref>

501(c)(5) organizations can receive unlimited contributions from corporations, individuals, and labor unions. The names and addresses of contributors are not required to be made available for public inspection.<ref name="schedule b general">"[https://www.irs.gov/pub/irs-pdf/f990ezb.pdf Form 990, Schedule B: Schedule of Contributors: General Instructions] {{Webarchive|url=https://web.archive.org/web/20170504215953/https://www.irs.gov/pub/irs-pdf/f990ezb.pdf |date=May 4, 2017 }}". ''Internal Revenue Service''. 2015.</ref> All other information, including the amount of contributions, the description of noncash contributions, and any other information, is required to be made available for public inspection unless it clearly identifies the contributor.

A union membership dues paid to a 501(c)(5) organization are generally an ordinary and necessary business expense.<ref name= 1.162-15>"[https://www.law.cornell.edu/cfr/text/26/1.162-15 Rev. Rul. 1.162-15(c)] {{Webarchive|url=https://web.archive.org/web/20170210093550/https://www.law.cornell.edu/cfr/text/26/1.162-15 |date=February 10, 2017 }}". ''Internal Revenue Service''. 1965.</ref> The membership dues are tax-deductible in full unless a substantial part of the 501(c)(5) organization's activities consists of political activity, in which case a [[tax deduction]] is allowed only for the portion of membership dues that are for other activities.<ref name= 1.162-15/>

Because associations involved in fishing and seafood harvesting were having difficulties qualifying for reduced postal rates,<ref>S. Rep. No. 94-938 at 419, 420, reprinted in 1976-3 C.B. (vol. 3) 457-458.</ref> in 1976 Congress established Internal Revenue Code Section 501(5) to define "agriculture" as the art or science of cultivating land, harvesting crops or aquatic resources, or raising livestock.<ref name= 501c5/>

Every organization, including a 501(c)(5) organization, that expressly advocates for the election or defeat of a particular political candidate and spends more than $250 during a calendar year must disclose the name of each person who contributed more than $200 during the calendar year to the [[Federal Election Commission]].<ref name= fec1/><ref name= fec3/> The Federal Election Commission is required to enforce this provision based on a [[United States District Court for the District of Columbia|federal court]] decision in 2018.<ref name= fec2/><ref name= fec4/><ref name= fec3/>

==501(c)(6)==
A '''501(c)(6) organization''' is a business league, a chamber of commerce like the [[U.S. Chamber of Commerce]], a real estate board, a board of trade, a professional football league or an organization like the [[Edison Electric Institute]] and the [[Security Industry Association]], that are not organized for profit and no part of the net earnings goes to the benefit of any private shareholder or individual.<ref name = irs-501c6>Reilly, John Francis; Hull, Carter C.; Braig Allen, Barbara A. "[https://www.irs.gov/pub/irs-tege/eotopick03.pdf IRC 501(c)(6) Organizations] {{Webarchive|url=https://web.archive.org/web/20170901230440/https://www.irs.gov/pub/irs-tege/eotopick03.pdf |date=September 1, 2017 }}". ''Exempt Organizations-Technical Instruction Program for FY 2003 ''. Internal Revenue Service. 2003.</ref> 

===Qualifications for exemption===
A business league may qualify if it is an association of persons having a common business interest, whose purpose is to promote the common business interest and whose activities improve business conditions rather than actually conduct the business itself.<ref>"[https://www.law.cornell.edu/cfr/text/26/1.501(c)(6)-1 26 CFR 1.501(c)(6)-1 - Business leagues, chambers of commerce, real estate boards, and boards of trade] {{Webarchive|url=https://web.archive.org/web/20170211030346/https://www.law.cornell.edu/cfr/text/26/1.501%28c%29%286%29-1 |date=February 11, 2017 }}". ''Internal Revenue Service''. Legal Information Institute. Cornell University Law School.</ref> Members of the organization must be of the same trade, business, occupation, or profession in order to qualify.<ref>"[https://www.irs.gov/pub/irs-tege/rr59-391.pdf Rev. Rul. 59-391, 1959-2 C.B. 151] {{Webarchive|url=https://web.archive.org/web/20170505103522/https://www.irs.gov/pub/irs-tege/rr59-391.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1959.</ref> A local chamber of commerce or board of trade could qualify for similar reasons except that they may promote the common economic interests of all the commercial enterprises in a given trade or community.<ref>"[https://www.irs.gov/pub/irs-tege/rr73-411.pdf Rev. Rul. 73-411, 1973-2 C.B. 180] {{Webarchive|url=https://web.archive.org/web/20170505110519/https://www.irs.gov/pub/irs-tege/rr73-411.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1973.</ref> 

In order to qualify for a tax-exemption under section 501(c)(6), the organization must specify that it seeks to promote and improve business condition for a specific type of business.<ref name= benefit>West, Lauren (October 24, 2022). "[https://www.claconnect.com/en/resources/articles/2022/benefit-plans-for-501c6-organizations-may-be-disallowed Benefit Plans for 501(c)(6) Organizations May Be Disallowed] {{Webarchive|url=https://web.archive.org/web/20221201214113/https://www.claconnect.com/en/resources/articles/2022/benefit-plans-for-501c6-organizations-may-be-disallowed |date=December 1, 2022 }}". ''[[CliftonLarsonAllen LLP]]''. Retrieved December 1, 2022.</ref> Improving business conditions for ''all'' types of businesses is not generally qualifying.<ref name= benefit/> Similarly, providing a service for a specific type of business is also not typically qualifying, as that would usually be more of a commercial enterprise.<ref name= benefit/> For example, the service of managing health insurance plans for its member businesses is often a commercial enterprise if it is not substantially related to improving the business conditions for specific lines of businesses.<ref name= benefit/><ref>American Automobile Association v. Commissioner, 19 T.C. 1146 (1953).</ref>

An association that promotes the common interests of certain hobbyists would not qualify because the Internal Revenue Service does not consider hobbies to be activities conducted as businesses.<ref>American Kennel Club v. Hoey, 142 F.2d 920 (2nd Cir. 1945).</ref>

An organization whose primary activity is advertising the products or services of its members does not qualify because the organization is performing a service for its members rather than promoting common interests.<ref>Automotive Electric Association v. Commissioner, 168 F.2d 366 (6th Cir. 1948).</ref><ref>"[https://www.irs.gov/pub/irs-tege/rr64-315.pdf Rev. Rul. 64-315, 1964-2 C.B. 147] {{Webarchive|url=https://web.archive.org/web/20170505103820/https://www.irs.gov/pub/irs-tege/rr64-315.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1964.</ref> If an organization's primary activity is advertising the products or services of its members' industry as a whole, however, the organization will generally qualify if it also performs other services for its members.<ref>"[https://www.irs.gov/pub/irs-tege/rr55-444.pdf Rev. Rul. 55-444, 1955-2, C.B. 258] {{Webarchive|url=https://web.archive.org/web/20170505103054/https://www.irs.gov/pub/irs-tege/rr55-444.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1955.</ref>

===Contributions and activities===
Much like 501(c)(4) and 501(c)(5) organizations, 501(c)(6) organizations may also perform some political activities.<ref name= lobbyinglaw /> 501(c)(6) organizations are allowed to [[lobbying in the United States|attempt to influence legislation]] that is related to the common business interests of its members.<ref name= rev-rul-61-177 />

A 501(c)(6) organization may receive unlimited contributions from corporations, individuals, and labor unions. The names and addresses of contributors are not required to be made available for public inspection,<ref name="schedule b general" /> with the exception of a 501(c)(6) organization that makes [[independent expenditure]]s.<ref name= fec1/><ref name= fec2/><ref name= fec3/><ref name= fec4/> All other information, including the amount of contributions, the description of non-cash contributions, and any other information, is required to be made available for public inspection unless it clearly identifies the contributor.  The [[U.S. Chamber of Commerce]] is a large political spender, and [[Freedom Partners]] used its status as a 501(c)(6) organization to raise and distribute over $250 million during the [[2012 United States presidential election#Campaigns|2012 election campaigns]] without disclosing its donors.<ref name="freedom-partners">{{cite news | author1= Mike Allen | author2= Jim Vandehei | title= The Koch brothers' secret bank | url= https://www.politico.com/story/2013/09/behind-the-curtain-exclusive-the-koch-brothers-secret-bank-96669.html | access-date= November 29, 2013 | work= [[Politico]] | date= September 11, 2013 | archive-date= December 3, 2013 | archive-url= https://web.archive.org/web/20131203191808/http://www.politico.com/story/2013/09/behind-the-curtain-exclusive-the-koch-brothers-secret-bank-96669.html | url-status= live }}</ref> The group's existence was not publicly known until nearly a year after the election.

A business's membership dues paid to a 501(c)(6) organization are generally an ordinary and necessary business expense.<ref name= 1.162-15 /> The membership dues are tax-deductible in full unless a substantial part of the 501(c)(6) organization's activities consists of political activity, in which case a tax deduction is allowed only for the portion of membership dues that are for other activities.<ref name= 1.162-15/>

Every organization, including a 501(c)(6) organization, that [[independent expenditure|expressly advocates for the election or defeat of a particular political candidate]] and spends more than $250 during a calendar year must disclose the name of each person who contributed more than $200 during the calendar year to the [[Federal Election Commission]].<ref name= fec1/><ref name= fec3/> The Federal Election Commission is required to enforce this provision based on a [[United States District Court for the District of Columbia|federal court]] decision in 2018.<ref name= fec2/><ref name= fec4/><ref name= fec3/>

===History===
The predecessor of IRC 501(c)(6) was enacted as part of the [[Revenue Act of 1913]]<ref name="16IIGa">[[Revenue Act of 1913|Tariff Act of 1913]], ch.16, § II (G)(a), 38 Stat. 72."[[Revenue Act of 1913|Tariff Act of 1913]], ch.16, § II (G)(a), 38 Stat. 72. "...nothing this section shall apply to labor, agricultural, or horticultural organizations, or to mutual savings banks not having a capital stock represented by shares, or to fraternal beneficiary societies, orders, or associations operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system, and providing for the payment of life, sick, accident, and other benefits to the members of such societies, orders, or associations and dependents of such members, nor to domestic building and loan associations, nor to cemetery companies, organized and operated exclusively for the mutual benefit of their members, nor to any corporation or association organized and operated exclusively for religious, charitable, scientific, or educational purposes, no part of the net income of which inures to the benefit of any private stockholder or individual, nor to business leagues, nor to chambers of commerce or boards of trade, not organized for profit or no part of the net income of which inures to the benefit of the private stockholder or individual ; nor to any civic league or organization not organized for profit, but operated exclusively for the promotion of social welfare.</ref> likely due to a U.S. Chamber of Commerce request for an exemption for nonprofit "civic" and "commercial" organizations, which resulted in IRC 501(c)(4) for nonprofit "civic" organizations and IRC 501(c)(6) for nonprofit "commercially-oriented" organizations.<ref name= irs-501c6/> The [[Revenue Act of 1928]] amended the statute to include real estate boards.<ref>Rev. Act of 1928, ch. 852, § 103(7), 48 Stat. 700.</ref> In 1966, professional football leagues were added to the described organizations.<ref>Act of November 8, 1966, Pub. L. 89- 800, § 6(a), 80 Stat. 1515.</ref>

The Revenue Act of 1913 related to professional football leagues had both antitrust and tax provisions: The antitrust provision was enacted to permit the merger of the [[National Football League|National]] and [[American Football League]]s to go forward without fear of an antitrust challenge under either the 1914 [[Clayton Antitrust Act]] or the 1914 [[Federal Trade Commission Act]].<ref>{{cite web|last1=Reilly|first1=John Francis|last2=Hull|first2=Carter C.|last3=Braig Allen|first3=Barbara|title=Exempt Organizations: Technical Instruction Program for FY 2003 IRC 501(c)(6) Organizations|url=https://www.irs.gov/pub/irs-tege/eotopick03.pdf|publisher=IRS|access-date=June 1, 2014|date=2003|archive-date=September 1, 2017|archive-url=https://web.archive.org/web/20170901230440/https://www.irs.gov/pub/irs-tege/eotopick03.pdf|url-status=live}}</ref> IRC 501(c)(6) amendment was enacted in 1966 to ensure that a professional football league's exemption would not be jeopardized because it administered a players' pension fund.<ref>H.R. Conf. Rept. No 2308, 89th Cong., 2d Sess. (1966), reprinted in 1966-2 C.B. 958, 963, 964.</ref> Additionally, a professional sports league's exemption is not to be jeopardized because its primary source of revenue is the sale of television broadcasting rights to its games because the broadcasting of games increases public awareness of the sport.<ref>"[https://www.irs.gov/pub/irs-tege/rr58-502.pdf Rev. Rul. 58-502, 1958-2 C.B. 271] {{Webarchive|url=https://web.archive.org/web/20170505103430/https://www.irs.gov/pub/irs-tege/rr58-502.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1958.</ref><ref>"[https://www.irs.gov/pub/irs-tege/rr80-294.pdf Rev. Rul. 80-294, 1980-2 C.B. 187] {{Webarchive|url=https://web.archive.org/web/20170505112639/https://www.irs.gov/pub/irs-tege/rr80-294.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1980.</ref>

In 2013, [[United States Senate|Senator]] [[Tom Coburn]] introduced legislation to disallow a tax exemption for the [[National Football League]], the [[Professional Golfers' Association of America]], and other professional sports organizations.<ref name= architect>{{cite news |title= The real architect of NFL's big profits |last= Kang |first= Cecilia |newspaper= The Washington Post |date= September 17, 2014 |page= A12 |url= https://www.proquest.com/docview/1562299916/ |access-date= May 11, 2022 |archive-date= March 20, 2023 |archive-url= https://web.archive.org/web/20230320223031/https://www.proquest.com/docview/1562299916/ |url-status= live }}</ref><ref name= helps>{{cite news |title= How the government helps the NFL maintain its power and profitability |last= Kang |first= Cecilia |newspaper= The Washington Post |date= September 17, 2014 |url= https://www.proquest.com/docview/1562987251/ |access-date= May 11, 2022 |archive-date= March 20, 2023 |archive-url= https://web.archive.org/web/20230320223032/https://www.proquest.com/docview/1562987251 |url-status= live }}</ref> Coburn estimated the tax exemption cost $100 million, but he said he could not get other members of Congress to support the legislation.<ref name= architect/><ref name= helps/>

==501(c)(7)==
A '''501(c)(7) organization''' is a [[social club|social or recreational club]] that is organized for pleasure, recreation, and other nonprofitable purposes.<ref name= 501c7eo>Langley, Jim; Rosenberg, Conrad. "[https://www.irs.gov/pub/irs-tege/eotopicc96.pdf C. Social Clubs - IRC 501(c)(7)] {{Webarchive|url=https://web.archive.org/web/20170505090312/https://www.irs.gov/pub/irs-tege/eotopicc96.pdf |date=May 5, 2017 }}". ''1996 Exempt Organization Continuing Professional Education Text''. Internal Revenue Service. 1996.</ref> Members must share interests and have a common goal directed toward pleasure and recreation, and the organization must provide opportunities for personal contact among members.<ref name= personalcontact>"[https://www.irs.gov/charities-non-profits/other-non-profits/social-clubs-requirements-for-exemption-personal-contact-required Social Clubs – Requirements for Exemption – Personal Contact Required] {{Webarchive|url=https://web.archive.org/web/20170630171550/https://www.irs.gov/charities-non-profits/other-non-profits/social-clubs-requirements-for-exemption-personal-contact-required |date=June 30, 2017 }}". ''Internal Revenue Service''. December 9, 2015.</ref><ref>"[http://www.irsvideos.gov/StartingOffRightNON501c3/player/Powerpoint_Slide_Presentation_with_Transcript.pdf Starting Off Right: What New Non- 501(c)(3) Organizations Need to Know] {{Webarchive|url=https://web.archive.org/web/20161227002918/https://www.irsvideos.gov/StartingOffRightNON501c3/player/Powerpoint_Slide_Presentation_with_Transcript.pdf |date=December 27, 2016 }}". ''Internal Revenue Service''. February 24, 2010.</ref> The organization's facilities and services must be open to its members and their guests only.<ref>Sullivan, Denise. "[http://smallbusiness.chron.com/501-c-7-corporation-56453.html What is a 501(c)(7) Corporation?] {{Webarchive|url=https://web.archive.org/web/20161019063843/http://smallbusiness.chron.com/501-c-7-corporation-56453.html |date=October 19, 2016 }}" ''The Houston Chronicle''. 2013.</ref> The organization must be a club of individuals, and no individual may derive profit from the organization's net earnings.<ref name= venable>Tenenbaum, Jeffrey S.; Journy, Matthew T. "[https://www.venable.com/requirements-for-tax-exempt-status-under-irc--501c7-a-primer-for-social-clubs-06-03-2008/ Requirements for Tax-Exempt Status under IRC § 501(c)(7): A Primer for Social Clubs] {{Webarchive|url=https://web.archive.org/web/20170218092625/https://www.venable.com/requirements-for-tax-exempt-status-under-irc--501c7-a-primer-for-social-clubs-06-03-2008/ |date=February 18, 2017 }}". ''[[Venable LLP]]''. June 2008.</ref> Examples include [[alumni association|college alumni association]]s; [[Fraternities and sororities|college fraternities or college sororities]] operating chapter houses for students; [[country club]]s; [[amateur sports|amateur sport clubs]]; [[supper club]]s that provide a meeting place, library, and dining room for members; [[hobby|hobby club]]s; and [[garden club]]s.<ref>"[https://www.irs.gov/publications/p557/ch04.html#en_US_201602_publink1000200325 Publication 557: Tax Exempt Status for Your Organization] {{Webarchive|url=https://web.archive.org/web/20170713041149/https://www.irs.gov/publications/p557/ch04.html#en_US_201602_publink1000200325 |date=July 13, 2017 }}". ''Internal Revenue Service''. Retrieved August 5, 2016.</ref>

===Activities===
A substantial amount of the 501(c)(7) organization's activities must be related to social and recreational activities for its members.<ref name= 501c7-1976>S. Rep. No. 94-1318, 94th Cong., 2nd Sess. 4 (1976), 1976-2 C.B. 597, 599.</ref> No more than 35 percent of its gross receipts may derive from non-members, and no more than 15 percent of its gross receipts is permitted to come from use of its facilities or services by the general public.<ref name= 501c7eo/> An organization that exceeds these limits may lose its 501(c)(7) status.<ref name= 501c7eo1990>"[https://www.irs.gov/pub/irs-tege/eotopich90.pdf H. Nonmember Income of Social, Fraternal, Veterans, and Social Welfare Organizations] {{Webarchive|url=https://web.archive.org/web/20170505090911/https://www.irs.gov/pub/irs-tege/eotopich90.pdf |date=May 5, 2017 }}". ''1990 Exempt Organization Continuing Professional Education Text''. Internal Revenue Service. 1990.</ref>

When a group of eight or fewer individuals, at least one of whom is a member, uses the organization's facilities and the member pays for the other individuals, the Internal Revenue Service will assume the nonmembers are the guests of the member, and the revenue is deemed to be derived from the member.<ref name= venable/> Similarly, if at least 75 percent of a group using club facilities are members of the organization, the Internal Revenue Service will assume the nonmembers are the guests of the member, and the revenue is deemed to be derived from the member.<ref name= venable/> It is the responsibility of the organization to maintain these records.<ref name= 501c7eo1990/> If the organization does not keep sufficient records to link revenue to a member, the Internal Revenue Service assumes the revenue came from a nonmember.<ref>"[https://www.irs.gov/irm/part4/irm_04-076-016.html Internal Revenue Manual: Part 4 Examining Process: Chapter 76 Exempt Organizations Examination Guidelines: Section 16 Social and Recreational Clubs - IRC §501(c)(7)] {{Webarchive|url=https://web.archive.org/web/20170501165711/https://www.irs.gov/irm/part4/irm_04-076-016.html |date=May 1, 2017 }}". ''Internal Revenue Service''. Retrieved August 5, 2016.</ref>

The organization is subject to [[Unrelated Business Income Tax]] for the revenue derived from nonmember use of its facilities and services, less allowable deductions.<ref name= 501c7eo1990/> If the organization sells assets that were previously used for recreational or social purposes, the proceeds are considered related business income as long as the proceeds are reinvested in the organization.<ref>"[http://www.cmaa.org/uploadedFiles/For_Members/Economy/501c7Checklist.pdf http://www.cmaa.org/uploadedFiles/For_Members/Economy/501c7Checklist.pdf Club Tax Book] {{Webarchive|url=https://web.archive.org/web/20161010153700/http://www.cmaa.org/uploadedFiles/For_Members/Economy/501c7Checklist.pdf |date=10 October 2016 }}". ''Mitchell L. Stump, CPA, PA''. Club Managers Association of America. December 2004.</ref> Public use of the organization's facilities must be minimal, generally either less than $2,500 per year or less than five{{nbsp}}percent of its total gross receipts from normal and usual activities of the club.<ref name= 501c7eo1990/> 

A 501(c)(7) organization cannot have a written policy of discriminating on the basis of race, color, or religion.<ref name= venable/><ref>"[https://www.irs.gov/charities-non-profits/other-non-profits/exempt-purposes-code-section-501c7 Exempt purposes - Code section 501(c)(7)] {{Webarchive|url=https://web.archive.org/web/20220605151917/https://www.irs.gov/charities-non-profits/other-non-profits/exempt-purposes-code-section-501c7 |date=June 5, 2022 }}". ''Internal Revenue Service''. March 28, 2022. Retrieved June 5, 2022.</ref> Nevertheless, a 501(c)(7) organization is permitted to limit its members to a particular religion in order to further the teachings of that religion.<ref name= venable/> An auxiliary of a 501(c)(8) fraternal benefit society that limits membership to members of a particular religion is allowed to do so as well.<ref name= venable/> Having written policies that limit its membership by ethnic origin and gender would not jeopardize the organization's tax-exempt status.<ref name= venable/><ref name= 501c7eo1990/>

===History===
The predecessor of Internal Revenue Code Section 501(c)(7) was part of the [[Revenue Act of 1913]], which provides a tax-exemption to "fraternal beneficiary societies, orders, or associations operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system".<ref name= 16IIGa/> Congress justified the tax-exemption with the reasoning that the members join to provide themselves with recreational or social organization without further tax consequences, similar as if they had paid for the benefits directly.<ref name = 501c7eo/> Tax-exemption was available for organizations operated exclusively for pleasure, recreation, and other nonprofitable purposes.<ref name= 501c7eo/>

In 1969, Congress passed a law stating that social and recreational clubs were permitted to engage in some unrelated business income, subject to income tax.<ref name= 501c7eo/>

==501(c)(8)==
A '''501(c)(8) organization''' is a [[benefit society|fraternal benefit society]].<ref name= 501c8-eo>"[https://www.irs.gov/pub/irs-tege/eotopicf04.pdf IRC 501(c)(8) Fraternal Beneficiary Societies and IRC 501(c)(10) Domestic Fraternal Societies] {{Webarchive|url=https://web.archive.org/web/20170706081603/https://www.irs.gov/pub/irs-tege/eotopicf04.pdf |date=July 6, 2017 }}". ''2004 EO CPE Text''. Internal Revenue Service. 2004.</ref>

===Eligibility===
The society must have members of a similar calling, recreation, or profession, or members who work together to accomplish a worthy goal.<ref name= nationalunion>National Union v. Marlow, 74 F. 775, 778-79 (8th Cir. 1896).</ref> The members have associated themselves in order to help each other and to promote the common cause.<ref name= nationalunion/> The society must have written documentation of its eligibility standards for membership, classes of membership, a process of admission, and rights and privileges of members.<ref>"[http://www.fraternalalliance.org/wp-content/uploads/2011/04/1983-NFCA-Model-Fraternal-Code.pdf Modern Fraternal Code Section 6]{{dead link|date=June 2017 |bot=InternetArchiveBot |fix-attempted=yes }}".</ref>

The members must have a common bond, which may be based on religious beliefs, gender, occupation, ethnicity, or shared values.<ref name= afa>"[https://netforum.avectra.com/eWeb/DynamicPage.aspx?Site=afalliance&WebCode=FraternalSociety What is a Fraternal Benefit Society?] {{Webarchive|url=https://web.archive.org/web/20161010153538/https://netforum.avectra.com/eWeb/DynamicPage.aspx?Site=afalliance&WebCode=FraternalSociety |date=10 October 2016 }}" ''American Fraternal Alliance''. Retrieved August 26, 2016.</ref>

The society must have a supreme governing body and subordinate lodges into which members are elected, initiated, or admitted in accordance with its laws.<ref name= 501c8-eo/> The supreme governing body should be composed of delegates elected directly by members or intermediate assemblies.<ref name= 501c8-eo/>

The society must offer benefits to members, which may include life insurance, medical insurance, scholarships, educational programs, travel opportunities, and discount programs.<ref name= afa/> Revenue generated from providing benefits to non-members must be insubstantial to the society and may be taxable as [[unrelated business income]].<ref>GCM 38312 (March 20, 1980).</ref>

===Donations===
An individual's donation to a fraternity is only a tax-deductible charitable contribution if the contribution "is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals."<ref>"[https://www.law.cornell.edu/uscode/text/26/170 Internal Revenue Code Section 170(c)(4)] {{Webarchive|url=https://web.archive.org/web/20161204021450/https://www.law.cornell.edu/uscode/text/26/170 |date=December 4, 2016 }}". ''Legal Information Institute''. Cornell University Law School. Retrieved May 21, 2017.</ref>

===History===
Fraternal benefit societies trace their lineage back through [[mutual benefit]] societies, [[friendly societies]] and eventually to medieval [[guild]]s.<ref name="ss">{{cite web|url=http://www.ssa.gov/history/briefhistory3.html/ |title=Historical Background and Development of Social Security |url-status=dead |archive-url=https://web.archive.org/web/20160102072306/https://www.ssa.gov/history/briefhistory3.html |archive-date=January 2, 2016 }}</ref> Many fraternal benefit societies were founded to serve the needs of immigrants and other under-served groups<ref>{{cite book | title =  Statistics of Fraternal Benefit Societies, 117th Edition (2011); American Fraternal Alliance, p. iv. }}</ref> who shared common bonds of religion, ethnicity, gender, occupation or shared values.

Section 38 of the [[Payne–Aldrich Tariff Act|Payne–Aldrich Tariff Act of 1909]] was the first law to provide a tax-exemption for fraternal beneficiary societies.<ref>Revenue Act of 1913. Pub. L. No. 63-6. Section II(G)(a). 38 Stat. 172.</ref> The tax-exemption was later codified as section 501(c)(8) with the [[Internal Revenue Code of 1954]].<ref name= 501c8-irs>"[https://www.irs.gov/irm/part7/irm_07-025-008.html 7.25.8 Fraternal Beneficiary Societies] {{Webarchive|url=https://web.archive.org/web/20170501174735/https://www.irs.gov/irm/part7/irm_07-025-008.html |date=May 1, 2017 }}". ''Internal Revenue Manual''. Internal Revenue Service. Retrieved August 26, 2016.</ref>

===Relationship to 501(c)(10)===
Similar to 501(c)(8) organizations, 501(c)(10) organizations are also fraternal societies, orders, or associations operating under the lodge system, but 501(c)(10) organizations do not offer life, sick, accident, or other benefits. 501(c)(10) organizations devote net earnings exclusively to religious, charitable, scientific, literary, educational, and fraternal purposes.<ref>
{{cite web |author=<!-- not stated --> |date= December 27, 2024|title= Fraternal organizations: What constitutes a lodge system?|url= https://www.irs.gov/charities-non-profits/fraternal-organizations-what-constitutes-a-lodge-system#:~:text=IRC%20Section%20501(c)(10)%20organizations%3A,%2C%20educational%2C%20and%20fraternal%20purposes.|website= IRS.gov  |location= |publisher= Internal Revenue Service|access-date= April 8, 2025}}
</ref>

==501(c)(13)==
A '''501(c)(13)''' organization is a certain type of cemetery company.

===Eligibility===
There are two primary types of eligible cemetery companies. A mutual cemetery company must be either "owned by and operated exclusively for the benefit of its lot owners who hold such lots for bona fide burial purposes and not for the purpose of resale" or engages in the burial of impoverished people performing similar charitable activities.<ref name= 1501c13-1>"[https://www.law.cornell.edu/cfr/text/26/1.501%28c%29%2813%29-1 § 1.501(c)(13)-1] {{Webarchive|url=https://web.archive.org/web/20181020053006/https://www.law.cornell.edu/cfr/text/26/1.501%28c%29%2813%29-1 |date=October 20, 2018 }}". ''Internal Revenue Service''. Legal Information Institute. Cornell University Law School. Retrieved October 19, 2018.</ref> A nonprofit cemetery corporation must be incorporated solely for the purpose of the burial or the cremation of bodies and no part of its net earnings inures to the benefit of any private shareholder or individual.<ref name= 1501c13-1/> Any net gain by the cemetery must be devoted to certain cemetery functions, such as the cemetery's operations, maintenance, and improvements; acquisition of cemetery property; and investment of the net gain in order to provide additional income for cemetery functions.<ref name= irs-eo-501c13>"[https://www.irs.gov/pub/irs-tege/eotopicj80.pdf Cemeteries] {{Webarchive|url=https://web.archive.org/web/20180221214449/https://www.irs.gov/pub/irs-tege/eotopicj80.pdf |date=February 21, 2018 }}". ''Exempt Organization Continuing Professional Education Texas''. Internal Revenue Service. 1980.</ref> Net gains are not allowed to be distributed to individuals.<ref name= irs-eo-501c13/>

The cemetery may restrict burials and cremations to a certain group of people, such as impoverished people, people adherent to a certain religion, or people who lived in a certain community, as long as it still serves a broad class of people and operates for public purposes, but a 501(c)(13) organization may not enforce overly restrictive restrictions.<ref name= irs-eo-501c13/><ref>"[https://www.irs.gov/pub/irs-tege/rr78-143.pdf Rev. Rul. 78-143, 1978-1 C.B. 162] {{Webarchive|url=https://web.archive.org/web/20170505112127/https://www.irs.gov/pub/irs-tege/rr78-143.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1978.</ref>

A perpetual care fund that is used by a profit-making cemetery to maintain cemetery properties and burial lots is not eligible under 501(c)(13).<ref>"[https://www.irs.gov/pub/irs-tege/rr64-217.pdf Rev. Rul. 64-217, 1964-2 C.B. 153] {{Webarchive|url=https://web.archive.org/web/20170505103805/https://www.irs.gov/pub/irs-tege/rr64-217.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1964.</ref> On the other hand, a nonprofit organization may have a perpetual care fund without jeopardizing its exemption under Section 501(c)(13).<ref name= irs-eo-501c13/>

A cemetery that owns or operates a [[morgue]], whether on its own grounds or elsewhere, is not eligible under 501(c)(13) because the Internal Revenue Service does not consider mortuary services necessarily incident to burial purposes.<ref name= irs-eo-501c13/><ref>"[https://www.irs.gov/pub/irs-tege/rr64-109.pdf Rev. Rul. 64-109, 1964-1 C.B. 190] {{Webarchive|url=https://web.archive.org/web/20170505103745/https://www.irs.gov/pub/irs-tege/rr64-109.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1964.</ref> The provision of traditional burial services that directly support and maintain basic tenets and beliefs of a religion regarding burial of its members" may still be eligible under 501(c)(13).<ref>"Rev. Rul. 79-359, 1979-45 I.R.B. 10". Internal Revenue Service. 1979.</ref>

A cemetery that buries animals is not eligible under 501(c)(13).<ref>"[https://www.irs.gov/pub/irs-tege/rr73-454.pdf Rev. Rul. 73-454, 1973-2 C.B. 185] {{Webarchive|url=https://web.archive.org/web/20170505110543/https://www.irs.gov/pub/irs-tege/rr73-454.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1973.</ref>

A cemetery company wishing to be recognized under Section 501(c)(13) needs to prepare and file Form 1024 with the Internal Revenue Service.<ref>"[https://taxmap.irs.gov/taxmap/pubs/p557-031.htm Publication 557] {{Webarchive|url=https://web.archive.org/web/20181130124139/https://taxmap.irs.gov/taxmap/pubs/p557-031.htm |date=November 30, 2018 }}". ''Internal Revenue Service''. p. 54. Retrieved October 19, 2018.</ref>

===Charitable contributions===
Charitable contributions to a 501(c)(13) organization are tax-deductible to the donor.<ref>"[https://www.law.cornell.edu/uscode/text/26/170 Internal Revenue Code Section 170(c)(5)] {{Webarchive|url=https://web.archive.org/web/20161204021450/https://www.law.cornell.edu/uscode/text/26/170 |date=December 4, 2016 }}". ''Internal Revenue Service''. Legal Information Institute. Cornell University Law School. Retrieved October 19, 2018.</ref> Payments for perpetual care of a particular lot or a particular crypt are not considered tax-deductible charitable contributions.<ref name= revrul-58-190>"[https://www.irs.gov/pub/irs-tege/rr58-190.pdf Rev. Rul. 58-190, 1958-1 C.B. 15] {{Webarchive|url=https://web.archive.org/web/20170505103349/https://www.irs.gov/pub/irs-tege/rr58-190.pdf |date=May 5, 2017 }}". ''Internal Revenue Service''. 1958.</ref> Payments made as part of the purchase price of a burial lot or crypt are not considered tax-deductible charitable contributions, even if a portion of the payment is for the perpetual care of the entirety of the cemetery.<ref name= revrul-58-190/> Bequests or gifts to a 501(c)(13) cemetery are not deductible for federal estate tax purposes or gift tax purposes.<ref>"Rev. Rul. 67-170, 1967-1 C.B. 272". ''Internal Revenue Service''. 1967.</ref><ref name= irs-eo-501c13/>

===History===
Historically, cemeteries were exempt from local property taxes and excise taxes in most states because states generally considered cemeteries to be performing a recognized civic service.<ref name= irs-eo-501c13/>

The [[Tariff Act of 1913]] provided an exemption from federal income taxes for mutual cemetery companies that were organized and operated exclusively "for the benefit of their members".<ref name= irs-eo-501c13/> In 1921, Congress extended the tax-exemption to cemetery companies that are not mutual and to cemetery companies that are not operated for profit as well as any corporation solely incorporated to operate a cemetery and whose net gains do not inure to any person.<ref name= irs-eo-501c13/>

In 1970, Congress added crematorium in the definition of cemetery for the purposes of Section 501(c)(13).<ref name= irs-eo-501c13/><ref>"P.L. 91-618 (84 Stat. 1955)".</ref>

==See also==
{{Portal|United States}}
* [[527 organization]]
* [[Political action committee]]
* [[Not-for-profit arts organization]]
* [[Buckley v. Valeo]], which removed limits on spending on political speech

===Other tax-exempt organizations===
* 501(d)&nbsp;–  Religious or [[Apostolic poverty|apostolic]] organizations with the purpose of operating a religious community where the members live a communal life following the tenets and teachings of the organization.<ref name= 501d>{{cite web |title= Part 4. Examining Process: Chapter 76. Exempt Organizations Examination Guidelines: Section 29. Apostolic Associations&nbsp;– IRC 501(d) |work= Internal Revenue Manual |publisher= Internal Revenue Service |url= https://www.irs.gov/irm/part4/irm_04-076-029.html |access-date= December 5, 2015 |archive-date= December 8, 2015 |archive-url= https://web.archive.org/web/20151208123955/https://www.irs.gov/irm/part4/irm_04-076-029.html |url-status= live }}</ref> The organization's property is owned by each of the individuals in the community but, upon leaving, a member cannot withdraw any of the community's assets.<ref name= 501d/> The organization's income goes into a community treasury that is used to pay for the organization's operating expenses and supporting members and their families.<ref name= 501d/><ref>Rev. Rul. 57-574, 1957-2 c.b. 161.</ref>{{efn|name=ISA1950}}
* 501(e)&nbsp;–  Cooperative hospital service organizations that are organized to provide services for multiple tax-exempt hospitals.<ref>{{cite web |title= 26 CFR 1.501(e)-1 - Cooperative hospital service organizations |work= Legal Services Institute |url= https://www.law.cornell.edu/cfr/text/26/1.501(e)-1 |access-date= December 5, 2015 |archive-date= December 8, 2015 |archive-url= https://web.archive.org/web/20151208120846/https://www.law.cornell.edu/cfr/text/26/1.501(e)-1 |url-status= live }}</ref>
* 501(f)&nbsp;–  Cooperative service organizations of educational organizations that invest assets contributed by each of the organization's members.<ref>{{cite web |title= 26 U.S. Code § 501(e) |work= Legal Information Institute |url= https://www.law.cornell.edu/uscode/text/26/501 |access-date= December 5, 2015 |archive-date= December 25, 2019 |archive-url= https://web.archive.org/web/20191225220056/https://www.law.cornell.edu/uscode/text/26/501 |url-status= live }}</ref>
* 501(j)&nbsp;– Amateur sports organizations that either conduct national or international sporting competitions or develop amateur athletes for national or international sporting competitions.<ref name="501j">[[Wikisource:United States Code/Title 26/Chapter 1/Subchapter F/Part I/Section 501#j]]</ref>
* 501(k)&nbsp;–  [[Day care|Day care center]]s may qualify as tax-exempt under Section 501(k).<ref name="501k-1">[[Wikisource:United States Code/Title 26/Chapter 1/Subchapter F/Part I/Section 501#k]]</ref><ref name="501k-2">{{cite web |title= Part 7. Rulings and Agreements; Chapter 25. Exempt Organizations Determinations Manual; Section 3. Religious, Charitable, Educational, Etc., Organizations (Cont. 1); 7.25.3.7.11.4 (02-23-1999) Child Care Organizations |work= Internal Revenue Service |access-date= July 29, 2013 |url= https://www.irs.gov/irm/part7/irm_07-025-003-cont01.html |archive-date= November 10, 2013 |archive-url= https://web.archive.org/web/20131110182739/http://www.irs.gov/irm/part7/irm_07-025-003-cont01.html |url-status= live }}</ref><ref name="501k-3">{{cite web |title= IRC 501(k)&nbsp;– Child Care Organizations |work= 1986 EO CPE Text |year= 1986 |publisher= Internal Revenue Service |url= https://www.irs.gov/pub/irs-tege/eotopicd86.pdf |access-date= August 10, 2017 |archive-date= July 6, 2017 |archive-url= https://web.archive.org/web/20170706010006/https://www.irs.gov/pub/irs-tege/eotopicd86.pdf |url-status= live }}</ref> The day care center must provide child care away from their homes.<ref name="501k-2" /> At least 85 percent of the children served must be cared for while their parent or guardian is either employed, seeking employment, or a full-time student.<ref name="501k-4">{{cite web |title= IRC 501(k)&nbsp;– Child Care Organization |work= 1989 EO CPE Text |year= 1989 |publisher= Internal Revenue Service |url= https://www.irs.gov/pub/irs-tege/eotopich89.pdf |access-date= August 10, 2017 |archive-date= July 6, 2017 |archive-url= https://web.archive.org/web/20170706004446/https://www.irs.gov/pub/irs-tege/eotopich89.pdf |url-status= live }}</ref> Most of the day care center's funding must come from fees received for day care services.<ref name="501k-4" /> The day care center must also provide child care services to the general public.<ref name="501k-2" /> The tax exemption for certain day care centers was part of the [[Deficit Reduction Act of 1984]].<ref name="501k-3" />
* 501(n)&nbsp;–  Charitable risk pools that pool insurable risks of its members, which are tax-exempt charities.<ref>{{cite web |title= 26 U.S.C. § 501(n) |work= FindLaw |publisher= Thomson Reuters |url= http://codes.lp.findlaw.com/uscode/26/A/1/F/I/501 |access-date= December 5, 2015 |archive-date= December 8, 2015 |archive-url= https://web.archive.org/web/20151208111025/http://codes.lp.findlaw.com/uscode/26/A/1/F/I/501 |url-status= live }}</ref>
* 521(a)&nbsp;–  Farmers' cooperative associations that market its member farmers' products at market rates, make purchases at wholesale rates, and remit earnings to member farmers.<ref>{{cite web |title= Part 4. Examining Process: Chapter 44. Subchapter T Cooperatives: Section 1. IRC section 521 Exempt Farmers' Cooperatives |work= Internal Revenue Manual |publisher= Internal Revenue Service |url= https://www.irs.gov/irm/part4/irm_04-044-001.html |access-date= December 5, 2015 |archive-date= September 4, 2014 |archive-url= https://web.archive.org/web/20140904163915/http://www.irs.gov/irm/part4/irm_04-044-001.html |url-status= live }}</ref>{{efn|name=ISA1950}}
* 527&nbsp;–  [[527 organization|Political organizations]] that operate primarily to raise or spend money to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office,<ref>[https://www.law.cornell.edu/uscode/text/26/527 26 U.S. Code § 527 - Political organizations] {{Webarchive|url=https://web.archive.org/web/20170706113558/https://www.law.cornell.edu/uscode/text/26/527 |date=July 6, 2017 }}". ''Legal Information Institute''. Accessed December 4, 2015.</ref> such as [[political parties]], [[political action committee]]s, and [[Political action committee#Super PACs|Super PAC]]s.
* 528&nbsp;– Homeowner associations, condominium management associations, residential real estate management associations, and timeshare associations may elect to be exempt from income tax on their exempt-function income under Section 528.<ref name= porter>Porter, Gary. "[http://501c4taxexempt.com/ 501(c)(4) Tax Exempt Homeowners Associations] {{Webarchive|url=https://web.archive.org/web/20170220043343/http://www.501c4taxexempt.com/ |date=February 20, 2017 }}". Hinricher, Douglas & Porter, LLP. Accessed March 1, 2016.</ref><ref>"[https://www.law.cornell.edu/uscode/text/26/528 26 U.S. Code § 528 - Certain homeowners associations] {{Webarchive|url=https://web.archive.org/web/20170210092223/https://www.law.cornell.edu/uscode/text/26/528 |date=February 10, 2017 }}". ''Legal Information Institute''. Cornell University Law School. Accessed March 1, 2016.</ref><ref>"[https://www.irs.gov/pub/irs-pdf/i1120h.pdf 2015 Instructions for Form 1120-H: U.S. Income Tax Return for Homeowners Associations] {{Webarchive|url=https://web.archive.org/web/20170430024723/https://www.irs.gov/pub/irs-pdf/i1120h.pdf |date=April 30, 2017 }}". ''Internal Revenue Service''. Accessed on March 1, 2016.</ref><ref name= irs-hoa>"[https://www.irs.gov/pub/irs-tege/eotopicr82.pdf Homeowners' Associations Under IRC 501(c)(4), 501(c)(7) and 528] {{Webarchive|url=https://web.archive.org/web/20170505092040/https://www.irs.gov/pub/irs-tege/eotopicr82.pdf |date=May 5, 2017 }}". ''Exempt Organizations Continuing Professional Education Text''. [[Internal Revenue Service]]. 1982.</ref> Alternatively, some homeowner associations may qualify under Section [[501(c)(4)]] instead.<ref name= porter/><ref name= irs-hoa/> A homeowner association that provides only social and recreational activities may qualify under Section [[501(c)(7)]].<ref name= irs-hoa/>
* 529&nbsp;–  [[529 plan|Qualified tuition plans]] operated by a state or educational institution.<ref>"[https://www.irs.gov/uac/529-plans-questions-and-answers 529 Plans: Questions and Answers] {{Webarchive|url=https://web.archive.org/web/20170801091054/https://www.irs.gov/uac/529-plans-questions-and-answers |date=August 1, 2017 }}". ''Internal Revenue Service''. August 24, 2015.</ref>
* 4947(a)(1)&nbsp;–  Non-exempt charitable trusts that have exclusively charitable interests.<ref name= 4947a>{{cite web |title= Part 7. Rulings and Agreements: Chapter 26. Private Foundations Manual: Section 15. IRC 4947 Trusts |work= Internal Revenue Manual |publisher= Internal Revenue Service |url= https://www.irs.gov/irm/part7/irm_07-026-015.html |access-date= December 5, 2015 |archive-date= December 8, 2015 |archive-url= https://web.archive.org/web/20151208140154/https://www.irs.gov/irm/part7/irm_07-026-015.html |url-status= live }}</ref>
* 4947(a)(2)&nbsp;–  Split-interest trusts.<ref name= 4947a/>
* 115(1)&nbsp;– Entities that derived their income a public utility or the exercise of any essential governmental function and accruing to a state or municipality.<ref name= irc115>{{USCode|26|115}}</ref>
* 115(2)&nbsp;– States and municipalities.<ref name= irc115/>
* 892(a)&nbsp;– Foreign governments.<ref name= irc892>{{USCode|26|892}}</ref><ref name= eotopick92>Bloom, James F.; Luft, Edward D.; Reilly, John F. (1992). "[https://www.irs.gov/pub/irs-tege/eotopick92.pdf  Foreign Activities of Domestic Charities and Foreign Charities] {{Webarchive|url=https://web.archive.org/web/20180808112941/https://www.irs.gov/pub/irs-tege/eotopick92.pdf |date=August 8, 2018 }}". ''Exempt Organizations Continuing Professional Education Text''. Internal Revenue Service. p. 5.</ref>
* 892(b)&nbsp;– Public international organizations or international-organization preparatory commissions in which the Government of the United States participates.<ref name= irc892/><ref name= eotopick92/>

==Notes==
{{notelist}}

== References ==
{{Reflist|30em}}

==Further reading==
* {{cite book |last= Hakanson |first= Bill |year= 2013 |title= How to Succeed with Nonprofit Trade and Professional Associations |isbn = 978-1484805749 }}
* Hamburger, Philip, ''Liberal Suppression:  Section 501(c)(3) and the Taxation of Speech'', University of Chicago Press (2018).
* {{cite report|last=Chung|first=Justin C.|date=January 3, 2025|title=Tax-Exempt Organizations Under Internal Revenue Code Section 501(c): Political Activity Restrictions|publisher=[[Congressional Research Service]]|url=https://crsreports.congress.gov/product/pdf/RL/RL33377|access-date=February 11, 2025}}

== External links ==
{{Wikisource|United States Code/Title 26/Chapter 1/Subchapter F/Part I/Section 501#c|26 U.S.C. § 501}}
* {{cite web |url = https://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check |title = IRS list of charities eligible to receive deductible contributions search or download |publisher = Internal Revenue Service |url-status = dead |archive-url = https://web.archive.org/web/20160515100248/https://www.irs.gov/Charities-%26-Non-Profits/Exempt-Organizations-Select-Check |archive-date = May 15, 2016 }}
* {{cite web |url = https://www.irs.gov/pub/irs-pdf/p557.pdf |title=IRS Publication 557 |publisher=Internal Revenue Service}} Publication 557 governs 501(c) organizations.
* {{cite web|url=http://tfcny.fdncenter.org/990s/990search/esearch.php |title=Look up funds in a 501(c)(3) (990 search) |publisher=Foundation Center |url-status=dead |archive-url=https://web.archive.org/web/20130523043941/http://tfcny.fdncenter.org/990s/990search/esearch.php |archive-date=May 23, 2013 }}
* {{cite web |url = http://www.data360.org/graph_group.aspx?Graph_Group_Id=267 |title = Historical data regarding the number of 501(c) organizations in the U.S. |publisher = Data 360 |access-date = October 10, 2006 |archive-url = https://web.archive.org/web/20090302171634/http://www.data360.org/graph_group.aspx?Graph_Group_Id=267 |archive-date = March 2, 2009 |url-status = dead }}
* {{cite web |url = https://nccs.urban.org/ |title=Number, Finances and other data on 501(c) organizations |publisher=[[National Center for Charitable Statistics]]}}

[[Category:Internal Revenue Code|0501c]]
[[Category:Non-profit organizations based in the United States]]
[[Category:Taxation in the United States]]
[[Category:Charity law]]