The term "tax-exempt organization" generally refers to an organization that is exempt from federal income taxes under the Internal Revenue Code (IRC). Although the IRC describes more than 30 types of organizations that qualify for exemption, the type that people often mean when using the term "tax-exempt organization" is found in Section 501(c)(3). What is a nonprofit (not-for-profit) organization? This can be misleading depending on the context. What is a private foundation? Can tax-exempt organizations participate in election activities? Whether or not the organization incorporates, it may need to file for recognition of tax-exempt status from the IRS depending on its tax status. If the organization will be a Section 501(c)(3) organization, it is generally required to file an application for tax-exempt status with the IRS. It asks for the organization's basic contact information and must be filed electronically. Certain information does not have to be disclosed. What resources provide information on general issues involving tax-exempt organizations? The following organizations provide further information on general topics related to tax-exempt organizations, including management, accountability, and fund-raising practices. The group also provides information on public policy issues of interest to nonprofit organizations and conducts and publishes research on various aspects of charitable giving and volunteering in the United States.
This report answers frequently asked questions about tax-exempt organizations. It provides basic answers and refers to sources of additional information that might be useful. The report focuses on the types of organizations described in Internal Revenue Code (IRC) Section 501(c), with the main emphasis on Section 501(c)(3) charitable organizations.
One set of questions addresses some of the primary characteristics of tax-exempt organizations, including whether they may participate in lobbying and election-related activities, and defines the terms "tax-exempt," "nonprofit (not-for-profit)," and "private foundation."
Another group of questions provides general information on how to form a tax-exempt organization, what information must be disclosed to the IRS and the public, and how an organization might lose its tax-exempt status.
The report ends with questions intended to help the reader find resources that provide information on specific organizations and additional information on tax-exempt organizations in general.
This report summarizes information with respect to tax-exempt organizations. It should not be relied on for specific tax advice. Such advice should be sought directly from the IRS or qualified tax professionals.