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In addition to our 501(c)3 application services, we can prepare
applications for the different sections of the 501c code.
Our $499 legal fee includes preparation of the necessary forms and
supporting documents for the IRS and state tax revenue boards,
reviewing and amending the organizing documents and preparation
of corporate bylaws.
501(c)4
501(c)4 exemptions are given to civic leagues and other organizations
operated exclusively for the promotion of social welfare,
or local associations of employees the membership of which
is limited to a designated company or persons in a particular
municipality or neighborhood and the net earnings of which
are devoted exclusively to charitable, educational, or recreational
purposes. Characteristics that set these organizations apart
from a 501(c)(3) organizations include an unlimited ability
to lobby for legislation and the ability to participate in
political campaigns.
Unlike donations to 501(c)(3) non-profit organizations,
donations to a section 501(c)(4) organization are not deductible
by the donor under section 170 of the code unless the recipient
organization is either a volunteer fire department as described
in revenue ruling 80-77 or a veteran's organization with
at least 90% of its membership consisting of war veterans
as described in IRS Revenue Ruling 84-140.
501(c)(6)
The 501(c)(6) is specifically reserved to Professional and
Trade organizations (Associations and Societies), chamber
of commerce organizations, economic development corporations,
real estate boards, trade boards, professional football
leagues, and other types of business leagues. They are characterized
by a common business interest, which the organization typically
promotes. Organizations under this category are exempt from
most federal income taxes. "Membership Dues" for
a 501(c)(6) are tax deductible as business expenses, however
any percentage of these used for political activities (like
lobbying) is not tax deductible. The organization must report
what percentage of these "dues" is not deductible.
501(c)(6) organizations may engage in limited
political activities that inform, educate, and promote their
given interest. They may not engage in direct expenditures
advocating a vote for a political candidate or cause. Donations
to 501(c)(6) organizations are not required to be disclosed.
501(c)(7)
A section 501(c)(7) organization is permitted
to receive up to 35% of its gross receipts, including investment
income, from outside of its membership without losing its
tax-exempt status. However, only 15% of the organization's
gross receipts may be derived from use of the organization's
facilities by the general public.
The existence of private inurement can
operate to deprive a social club of its exempt status. The
general test is whether the club generates revenue from
non-members, the use of which overflows to the personal
advantage of the members (such as reduced dues, improved
facilities, and the like).
501(c)(10)
501(c)(10) establishes exemption from federal
income taxes for groups, associations or organizations that
operate as a fraternal organization. These groups usually
operate as "lodges" or sub-chapters under the
control and/or supervision of a parent.
The tax-exempt function is related
to the cause that these groups raise funds for. While they
are a tax-exempt organization, the only charitable tax deductible
contributions that are allowed must be used exclusively
for the support of a recognized 501(c)(3) public charity.
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