WHAT ARE TAX EXEMPT ORGANIZATIONS?
The process of forming a tax exempt organization can be complex and confusing. Furthermore, tax exempt status does not necessarily mean charitable status. To qualify for charitable status under the Internal Revenue Code ( 501(c)(3)), your organization must be organized for one or more of the purposes specifically designated in the Code, namely: charitable; religious; educational; scientific; literary; testing for public safety; fostering national or international amateur sports competition; or the prevention of cruelty to children or animals. Additional tax exemptions exist under separate sections of the IRC for other groups, including: labor unions, chambers of commerce, social and recreational clubs, fraternal societies, civic leagues, credit unions, farmers’ coops, mutual insurance companies, and legal service organizations.
