tax exemption

The CivicMinded Companion

501(c)(3) tax-exemption, 501(c)(3) tax-exempt status (03/06/08) - certification issued by the U.S. Internal Revenue Service verifying that a nonprofit organization, trust, or association is operating for charitable purposes, and, meets and maintains qualifying criteria set forth in the federal tax code.

Quotes and notes ~

Nonprofit organizations seek tax-exempt status from the Internal Revenue Service [under Section 501(c)(3) of the Internal Revenue Code] for the purpose of (1) exempting any revenue they receive from federal income tax and (2) accepting grants from foundations and financial contributions which are tax-deductible by donors. Tax-exempt status is determined through an application process with the Internal Revenue Service. Tax Information for Charities & Other Non-Profits, Internal Revenue Service



Nonprofit organizations which have received a 501(c)(3) tax-exemption are prohibited from engaging in certain activities (such as operating for the private interest of the founder) and from participating in elections (supporting or opposing candidates). However, they may engage in advocacy of all types, e.g., events, public education, Capitol Hill days, and lobbying (subject to some restrictions). More information about advocacy and permissible lobbying is available from the Alliance for Justice and the Center for Lobbying in the Public Interest.



Engaging in prohibited activities results in loss of tax-exempt status.