How To File for Tax Exemption Under Section 501(a)

June 25, 2019
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The Internal Revenue Code of the United States provides for certain organizations to enjoy exemption from federal income tax. While charitable 501(c)(3) organizations are most commonly known for receiving tax exemptions, many other organizations can also file for exemption under section 501(a) of the tax code.

According to section 501(a), “an organization described in subsection (c) or (d) or section 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503.” This means that all the following can apply for recognition of exemption using Form 1024:

  • 501(c)(2) Title holding corporations
  • 501(c)(4) Civic leagues, social welfare organizations
  • 501(c)(5) Labor, agricultural, or horticultural organizations
  • 501(c)(6) Business leagues, chambers of commerce, etc.
  • 501(c)(7) Social clubs
  • 501(c)(8) Fraternal beneficiary societies, orders, or associations
  • 501(c)(9) Voluntary employees’ beneficiary associations
  • 501(c)(10) Domestic fraternal societies, orders, etc.
  • 501(c)(12) Benevolent life insurance associations, mutual ditch or irrigation companies, mutual or cooperative telephone companies
  • 501(c)(13) Cemetery companies
  • 501(c)(15) Mutual insurance companies or associations
  • 501(c)(17) Trusts providing for the payment of supplemental unemployment compensation benefits
  • 501(c)(19) A post, organization, auxiliary unit, etc. of past or present members of the Armed Forces of the United States
  • 501(c)(25) Title holding corporations or trusts

You can have a 501(a) exempt organization and a 501(c)(3) charitable organization at the same time. However, if you’re not qualified as a 501(c)(3), where you need to file Form 1023, then Form 1024 is probably the right route for your organization. You can read more about the IRS guidelines for tax emptions in Publication 557. If a group of organizations is affiliated with a central organization, they may be able to apply together with the IRS. For more information about group exemptions, check out Publication 4373.

Any of these organizations are required to file Form 990 or Form 990EZ to provide the IRS with current information.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.