There are more than 30 types of tax-exempt organizations described in the Internal Revenue Code (IRC). Most tax-exempt organizations fall into one of five types: the organizations described in IRC Â§Â§ 501(c)(3), 501(c)(4), 501(c)(5), 501(c)(6), and 527. This report was developed to answer frequently asked questions about the differences among these organizations: how they are defined; what they can and cannot do; how they obtain exempt status; and what kind of information they must disclose to the IRS and the public. Similarly, a trade association might have a lobbying affiliate, a charitable affiliate, and a political action committee. 527 organizations have an additional reporting requirement that 501(c) organizations are not subject to. The information contained in this report is summarized in the following chart.
This report addresses the differences among the tax-exempt organizations described in Internal Revenue Code subsections 501(c)(3), 501(c)(4), 501(c)(5), 501(c)(6), and section 527âcharitable organizations, social welfare organizations, labor unions, trade associations, and political organizations, respectively.
Each type of organization has a unique statutory definition, enjoys benefits from obtaining tax-exempt status, is subject to statutory limitations on its activities, and must disclose certain information to the IRS and the general public. At the end of the report is a chart that summarizes the organizations' characteristics and reporting requirements.