How to Start a Nonprofit Group for a Class Reunion; Section 501(c)(6) of the Internal Revenue Code provides a federal tax exemption for business leagues, chambers of commerce and other professional leagues that are not organized for profit. Tax-Exemption. The difference between a 501(c)(3) and a 501(c)(4) are slight, but is mainly determined by the type of organization that is established. --Stephanie H. Thank you for your informative and keen advice on nonprofit matters. The process is pretty much the same whether you are pursuing 501c6 reinstatement or a new status of 501c3. Another important consideration: as a 501c6 organization, your group is free to lobby or endorse political candidates without IRS restriction, while 501c3 organizations are severely limited from engaging in any advocacy and are prohibited from endorsing candidates.

There is a common misconception that a tax-exempt nonprofit organization is a 501(c) or 501(c)(3) organization. A 501(c) organization is a nonprofit organization in the federal law of the United States according to Section 501(c) and is one of over 29 types of nonprofit organizations exempt from some federal income taxes.Sections 503 through 505 set out the requirements for obtaining such exemptions. Your revenues aren’t high enough to warrant having to file prior year Form 990s. Section 501(c)(6) of the Internal Revenue Code provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues, which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual. Lincoln Arneal is a Senior Editor at Nonprofit Hub and brings loads of real world nonprofit experience to the team. I believe it's a unique and concise place to get answers to this often wispy area called nonprofit. The only problem I see with pursuing 501c3 status is that you may have some taxable revenue issues for the period of time you were operating after revocation. He is the past executive director of a nonprofit that provides leadership development to junior high and high school students. Here's what our readers say about Nonprofit Issues Thanks again for your excellent and helpful website - it's a wonderful resource for the non-profit community! The IRS has different publications and forms to assist non-profits. The 501(c) section under the Internal Revenue Service guidelines and regulations is designed for non-profit organizations. In actuality, these letters and numbers refer to specific tax categories in the Internal Revenue Code. A nonprofit organization with a tax-exempt status is not required to pay corporate tax on income that comes from activities that are sufficiently related to its purposes. He looks to bring the insights from his time forming, developing and running a nonprofit to help others in their quest to do good.