INTERNAL REVENUE SERVICE    501
TAX-EXEMPT AND GOVERNMENT ENTITIES
EXEMPT ORGANIZATIONS,

Compliance  
Guide for  
Tax-Exempt  
Organizations  
(Other than 501(c)(3)  
Public Charities and  
Private Foundations)           ,
                                      (a)
Inside:
Activities that may jeopardize  
exempt status,
Federal information returns, tax  
returns or notices that must be filed,
Recordkeeping—why, what, when,
Changes to be reported to the IRS ,
Required public disclosures,
Resources for tax-exempt organizations   ,

CONTENTS,

What activities may jeopardize  
an organization’s tax-exempt status?                                2,
Private Benefit and Inurement  2,
Political Campaign Activities 3,
Legislative Activities  5,
What federal information returns,  
tax returns and notices must be filed?                              6 ,
Form 990, Return of Organization Exempt From Income Tax, Form  
990-EZ, Short Form Return of Organization Exempt From Income Tax  
and Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt 
Organizations not Required To File Form 990 or 990-EZ   6,
Form 990-T, Exempt Organization Business Income Tax Return  10        ,
Employment Tax Returns12                                              ,
Why keep records?                                                   14,
Evaluate Programs 14                                                  ,
Monitor Budgetary Results 14                                          ,
Prepare Financial Statements 15                                       ,
Prepare Annual Information and Tax Returns15                          ,
Identify Sources of Receipts 15                                       ,
Substantiate Revenues, Expenses and Deductions for  
Unrelated Business Income Tax (UBIT) Purposes15                       ,
What records should be kept?                                        16,
Accounting Periods and Methods 16                                     ,
Supporting Documents17,
How long should records be kept?                                    20,
Record Retention Periods  20,
How should changes be reported to the IRS?                          20,
Reporting Changes on the Annual Information Return  20,
Determination Letters and Private Letter Ruling Requests 21,
What disclosures are required?                                      22,
Public Inspection of Exemption Applications and Annual Returns  22    ,
Sale of Free Government Information 23,
Solicitation Notice 23,
Nondeductible Lobbying and Political Expenditures 24
Charitable Contributions 25,
How to get IRS assistance and information                           26,
Specialized Assistance for Tax-Exempt Organizations 26                ,
Tax Publications for Exempt Organizations27,
Forms for Exempt Organizations27,
General IRS Assistance  28                                            ,
Tax-exempt organization reference chart                             29,

                               501

Compliance  
Guide for  
Tax-Exempt 
Organizations  
(Other than 501(c)(3)  
Public Charities and  
Private Foundations)  ,
                                       (a)

 ederal tax law provides tax benefits to nonprofit organiza-
 tions recognized as exempt from federal income tax under   
          section 501(a) of the Internal Revenue Code (the Code)  
    The Code requires that tax-exempt organizations comply with 
Ffederal tax law to maintain tax-exempt status and avoid penalties
In this publication, the IRS focuses on organizations that have 
been granted tax exemption under section 501(a) of the Code  
other than section 501(c)(3) public charities and private founda-
tions and section 527 political organizations For information  
on the compliance requirements of 501(c)(3) public charities 
and private foundations, see Publications 4221-PC, Compliance  
Guide for 501(c)(3) Public Charities, and 4221-PF, Compliance  
Guide for 501(c)(3) Private Foundations For information on 527 
political organizations, see www.irs.gov/polorgs 
This publication addresses activities that could jeopardize a 
tax-exempt organization’s exempt status and identifies general 
compliance requirements on recordkeeping, reporting, and  
disclosure for exempt organizations (EO’s) Content includes  
references to the statute, Treasury regulations, IRS publications 
and IRS forms with instructions This publication is neither  
comprehensive nor intended to address every situation
To learn more about compliance rules and procedures that  
apply to organizations that are exempt from federal income  
tax, see IRS Publication 557, Tax-Exempt Status for Your  
Organization, as well as the Life Cycles of Sections 501(c)(3), (4), 
(5) and (6) Organizations and Information for Other Non-profit 
Organizations on www.irs.gov/eo Stay abreast of new EO infor-
mation, also on this Web site, by signing up for the EO Update, a 
free e-newsletter for tax-exempt organizations and practitioners 
who represent them For further assistance, consult a tax adviser

                                                                     1

 What activities may jeopardize an  
 organization’s tax-exempt status?
                                                   (a)
 Once a non-profit organization has completed the applica-
 tion501process and has established that it is exempt from federal 
 income tax, the organization’s officers, directors, trustees and 
 employees still have ongoing responsibilities They must ensure 
 that the organization maintains its tax-exempt status and 
 meets its ongoing compliance responsibilities
 A tax-exempt organization that does not restrict its participa-
 tion in certain activities and does not absolutely refrain from 
 others, risks failing the operational requirements for exemption 
 from income tax and jeopardizing its tax-exempt status The 
 following summarizes certain limitations on the activities of 
 some common types of tax-exempt organizations

 Private Benefit and Inurement   ,
 Many types of non-501(c)(3) tax-exempt organizations includ-
 ing social welfare organizations, business leagues and trade 
 associations, social clubs, voluntary employees' beneficiary 
 associations, cemetery companies, and veterans' organizations, 
 among others, are prohibited, by statute, from allowing inure-
 ment of net earnings or assets of the organization to benefit 
 any insider An insider is a person who has a personal or private 
 interest in the activities of the organization such as an officer, 
 director, or a key employee An example of prohibited inure-
 ment would include payment of unreasonable compensation  
 to an insider 
 The types of activities that may be considered to constitute 
 prohibited inurement of earnings may differ from one Code 
 section to another depending on the specified exempt pur-
 poses of the organization Accordingly, an activity that will be 
 considered to result in inurement of earnings to a member of 
 a labor organization may not result in inurement of earnings 
 to a member of an agricultural organization or a social welfare 
 organization because the organizations are organized and 
 operated for different exempt purposes Go to the Life Cycles 
 of 501(c)(4), (5) and (6) organizations at www.irs.gov/eo for  
 further information about the inurement prohibition and  
 providing benefits to members In any case, inurement may 
 jeopardize an organization's exempt status

2

501(c)(4) Social Welfare Organizations,
In cases where a 501(c)(4) organization provides an excess 
(a)economic benefit to a person who is in a position to exercise 
substantial influence over its affairs, the organization has 
engaged in an excess benefit transaction (see Reporting 
Excess Benefit Transactions on page 8) that subjects  
the person to possible excise taxes Go to the Life Cycle of  
a 501(c)(4) organization at www.irs.gov/eo for details about 
inurement, private benefit, and excess benefit transactions

Political Campaign Activities ,
Section 501(c)(4), (5) and (6) organizations may engage in 
political campaign activities on behalf of or in opposition to 
candidates for public office Political campaign activities are 
those that influence or attempt to influence the selection, 
nomination, election or appointment of an individual to a 
federal, state, or local public office In order to retain its tax-
exempt status under section 501(c)(4), (5) or (6), an organi-
zation must ensure that its political campaign activities do  
not constitute the organization’s primary activity 
When a 501(c)(4), (5) or (6) organization’s communication 
explicitly advocates the election or defeat of an individual  
to public office, the communication is considered political  
campaign activity A tax-exempt organization that makes 

                                                                  3

 expenditures for political campaign activities shall be subject  
 to tax in an amount equal to it its net investment income for 
 the year or the aggregate amount expended on political  
 campaign activities during the year, whichever is less
 Sometimes a 501(c)(4), (5) or (6) organization takes positions 
 on public policy issues that divide candidates in an election 
 for public office In these situations, the organization needs 
 to consider all the facts and circumstances of the communica-
 tion in order to determine whether the expenditure is directed 
 toward campaign intervention or is merely issue advocacy 
 related to the organization’s exempt purpose 
 The IRS considers the following factors that tend to show an 
 advocacy communication is political campaign activity when 
 evaluating a communication on a public policy issue:
 n The communication identifies a candidate for public office;
 n The timing of the communication coincides with  
  an electoral campaign;
 n The communication targets voters in a particular election;
 n The communication identifies the candidate’s position on the 
  public policy issue that is the subject of the communication;
 n The position of the candidate on the public policy issue has 
  been raised as distinguishing the candidate from others in 
  the campaign, either in the communication itself or in other 
  public communications; and 
 n The communication is not part of an ongoing series of  
  substantially similar advocacy communications by the  
  organization on the same issue

 Factors that tend to show that an advocacy communication  
 on a public policy issue is not political campaign activity 
 include the following:
 n The absence of any one or more of the factors listed above;
 n The communication identifies specific legislation, or a  
  specific event outside the control of the organization, that 
  the organization hopes to influence;
 n The timing of the communication coincides with a specific 
  event outside the control of the organization that the  
  organization hopes to influence, such as a legislative vote  
  or other major legislative action (for example, a hearing 
  before a legislative committee on the issue that is the  
  subject of the communication);

4

n The communication identifies the candidate solely as a  
 government official who is in a position to act on the public 
 policy issue in connection with the specific event (such as  
 a legislator who is eligible to vote on the legislation); and
n The communication identifies the candidate solely in the  
 list of key or principal sponsors of the legislation that is the 
 subject of the communication

In lieu of using its own funds, a 501(c)(4), (5) or (6) organiza-
tion may establish a section 527 political organization, called 
a separate segregated fund, to engage in political campaign 
activities Separate segregated funds must give notice to the 
IRS in order to be tax exempt unless the fund is required to 
report to the Federal Election Commission as a political com-
mittee, it reasonably anticipates that it will always have less 
than $25,000 in gross receipts for any taxable year or meets 
one of the other exceptions Access www.irs.gov/polorgs for 
additional information about political organizations 

Legislative Activities,
In general, section 501(c)(4), 501(c)(5) or 501(c)(6) tax-exempt  
organizations may engage in an unlimited amount of lobbying 
(ie, attempting to influence legislation), provided that the 
lobbying is related to the organization’s exempt purpose An 
organization will be regarded as attempting to influence leg-
islation if it contacts, or urges the public to contact, members 
or employees of a legislative body for purposes of proposing, 
supporting or opposing legislation, or if the organization 
advocates the adoption or rejection of legislation
There are non-tax related restrictions on lobbying that tax-
exempt organizations should be aware of as well Section 18 
of the Lobbying Disclosure Act of 1995, PL104-65, prohibits 
section 501(c)(4) organizations from receiving federal grants, 
loans, or other awards if they engage in lobbying activities, 
even if they conduct the lobbying with their own funds
Review the Life Cycles of 501(c)(4), 501(c)(5) and 501(c)(6) 
organizations at www.irs.gov/eo for information about the 
rules prohibiting substantial unrelated lobbying activities as 
well as the notice and reporting requirements applicable to 
certain organizations that incur nondeductible lobbying and 
political expenses

                                                                  5

 What federal information returns,  
 tax returns and notices must be filed?

 Most tax-exempt organizations have annual information 
 reporting obligations under the Code to ensure that they 
 continue to be recognized as tax-exempt And, although 
 they are exempt from federal income tax, they may be liable 
 for employment taxes, unrelated business income tax, excise 
 taxes, and certain state and local taxes, which could result in 
 additional filing requirements

 Form 990, Return of Organization Exempt From Income 
 Tax, Form 990-EZ, Short Form Return of Organization 
 Exempt From Income Taxand     Form 990-N, Electronic 
 Notice (e-Postcard) for Tax-Exempt Organizations Not 
 Required To File Form 990 or 990-EZ ,
 Tax-exempt organizations generally must file either a:
 n Form 990, Return of Organization Exempt From Income Tax     ; 
 n Form 990-EZ, Short Form Return of Organization Exempt 
  From Income Tax; or 
 n 990-N, Electronic Notice (e-Postcard) for Tax-Exempt 
  Organizations Not Required To File Form 990 or 990-EZ 
 The type of form or notice required generally is determined 
 by the amount of the exempt organization’s gross receipts or 
 total assets
 Filing Thresholds, 
 In 2008, the IRS redesigned Form 990 and adjusted the filing 
 thresholds over a graduated three-year transition period to 
 allow organizations to become familiar with and prepare to 
 use the new form An organization’s requirement to file the 
 redesigned Form 990 is determined by the amount of its gross 
 receipts or total assets Some tax-exempt organizations began 
 to use the new form in 2009 to report on activities for tax 
 year 2008 Others won’t begin until they report on the 2010 
 tax year in 2011 The filing threshold for Form 990-N will also 
 change in 2010 The charts, above right, explain which Form 
 990 a tax-exempt organization is required to file in the coming 
 tax years 
 Filing Dates,
 Forms 990, 990-EZ and 990-N must be filed by the 15th day 
 of the fifth month after the end of the organization’s annual 
 accounting period For example, if an organization’s tax period 
 ends on December 31, 2010, the form is due May 15, 2011 

6

                      2009 Tax Year                 Form 
                  (Filed in 2010 or 2011),          to File,
 Gross receipts normally   ≤ $25,000,               990-N,
 Gross receipts   > $25,000 and   < $500,000,       990-EZ 
 and Total assets   < $1.25 million,                or 990,
 Gross receipts   ≥ $500,000, or                            
 Total assets   ≥ $1.25 million,                    990,

         2010 Tax Year and later                    Form 
                  (Filed in 2011 and later),        to File,  
 Gross receipts normally   ≤ $50,000, 990-N,
 Gross receipts   > $50,000 and   < $200,000, and    990-EZ 
 Total assets   < $500,000,                         or 990,
 Gross receipts   ≥ $200,000, or                            
 Total assets   ≥ $500,000,                         990,

The due date for Form 990 and 990-EZ may be extended 
automatically for three months by filing Form 8868, 
Application for Extension of Time To File an Exempt 
Organization Return, before the due date An additional 
three-month extension may be requested on Form 8868  
if the organization shows reasonable cause why the return  
cannot be filed by the extended due date 
An organization cannot request an extension for filing the 
Form 990-N; however, there is no penalty for filing it late  
See Filing Penalties and Revocation of Tax-Exempt Status 
on page 9
Form 990 and Form 990-EZ,
The Forms 990 and 990-EZ consist of a core form and  
schedules Each organization that files the form must com-
plete the entire core form Form 990 filers will determine 
which schedules, if any, they must complete by answering  
the questions in Part IV, Checklist of Required Schedules  
Form 990-EZ filers may be required to file schedules as  
well, as noted in the form instructions
Filing Exceptions,
Tax-exempt organizations not required to file Forms 990  
or 990-EZ include:
n Certain organizations affiliated with governmental units;
n Organizations included in a group return;
n Black Lung Benefit Trusts, which file the Form 990-BL; 
n Farmers Cooperative Associations, which file Form 1120-C; 
 and

                                                              7

 n Organizations whose annual gross receipts are normally 
  $25,000 or less ($50,000 or less for tax years 2010 and 
  later) See Form 990-N, below
 If a tax-exempt organization’s gross receipts are normally 
 $25,000 or less ($50,000 or less for tax years 2010 and later), 
 and the organization elects to file the Form 990 or Form 990-EZ,  
 it must complete the entire return; otherwise, it must file the 
 Form 990-N An organization that only completes those items 
 of information on the Form 990 or Form 990-EZ that are 
 required to be provided on an electronic Form 990-N will not 
 be deemed to have met its electronic notice requirement 
 Reporting Excess Benefit Transactions,
 If a 501(c)(4) social welfare organization believes it provided 
 an excess benefit to a person who is in a position to exercise 
 substantial influence over the organization’s affairs, it must 
 report the transaction on Form 990 or Form 990-EZ Excess 
 benefit transactions are governed by section 4958 of the 
 Code Additional information can be found in the Form 990 
 and Form 990-EZ instructions 
 Form 990-N (e-Postcard)  ,  
 An organization with gross receipts normally $25,000 or less 
 (increasing to $50,000 beginning with the 2010 tax year) is 
 not required to file Form 990 (or Form 990-EZ) Instead, the 
 organization is required to electronically submit Form 990-N, 
 Electronic Notice (e-Postcard) for Tax-Exempt Organizations  
 Not Required To File Form 990 or 990-EZ 
 An organization is required to provide the following  
 information on Form 990-N:
 n the organization’s legal name;
 n any other names the organization uses;
 n the organization’s mailing address;

8

n the organization’s Web site address (if applicable);
n the organization’s taxpayer identification number (TIN);
n name and address of a principal officer of the organization; 
n the organization’s tax year;
n a statement that the organization’s annual gross receipts  
 are normally $25,000 or less ($50,000 or less beginning 
 with the 2010 tax year); and
n if applicable, a statement that the organization has  
 terminated or is terminating (going out of business)
By submitting the electronic notice on Form 990-N, an  
organization acknowledges that it is not required to file a 
Form 990 or 990-EZ because its gross receipts are normally 
$25,000 or less ($50,000 beginning with the 2010 tax year) 
In order to make this determination, the organization must 
keep records that enable it to calculate its gross receipts
Filers may access the user-friendly filing system to file a  
Form 990-N at www.irs.gov/eo or by going directly to the 
filing system Web site at http://epostcard.form990.org Read 
Filing Penalties and Revocation of Tax-Exempt Status, 
below, for consequences for failure to file this annual  
electronic notice, and www.irs.gov/eo for information about  
the Form 990-N

FILING PENALTIES AND  
REVOCATION OF TAX-EXEMPT STATUS                ,
If a Form 990 or Form 990-EZ is not filed by its due date, the IRS 
may assess penalties on the organization of $20 per day until it 
is filed. This penalty also applies when the filer fails to include 
required information or to show correct information. The penalty 
for failure to file a return or a complete return may not exceed the 
lesser of $10,000 or 5 percent of the organization’s gross receipts. 
For an organization that has gross receipts of over $1 million for 
the year, the penalty is $100 a day up to a maximum of $50,000. 
The IRS may impose penalties on organization managers who do 
not comply with a written demand that the information be filed. 
There is no penalty for filing Form 990-N late.
Section 6033(j) of the Code provides that failure to file Form 990, 
Form 990-EZ, or Form 990-N for three consecutive years results in 
revocation of tax-exempt status as of the filing due date for the 
third return. An organization whose exemption is revoked under 
this section must apply for reinstatement by filing a Form 1024 and 
paying a user fee, whether or not the organization was originally 
required to file for exemption. Reinstatement of exemption may 
be retroactive if the organization shows that the failure to file was 
for reasonable cause. Information with respect to the implementa-
tion of Section 6033(j) is available at www.irs.gov/eo.

                                                                      9

  e-Filing Requirements,
  Certain tax-exempt organizations are required to electronically 
  file with the IRS, based on their financial activity
  Tax-exempt organizations with $10 million or more in total 
  assets and that also file at least 250 returns in a calendar year, 
  (including income, excise, employment tax, and information 
  returns such as Forms W-2 and 1099), are required to elec-
  tronically file Form 990
  Tax-exempt organizations required to file Form 990-N must  
  do so electronically There is no paper form
  Other filers may elect to file Form 990 electronically Click  
  on the “IRS e-file” logo on the IRS Web site to get the facts 
  on e-filing 

  Form 990-T, Exempt Organization  
  Business Income Tax Return,
  Even if a tax-exempt organization is not required to file a 
  Form 990 or Form 990-EZ, it must file a Form 990-T, Exempt 
  Organization Business Income Tax Return, if it has $1,000 or 
  more of gross income from an unrelated trade or business 
  during the year Gross income is gross receipts minus cost of 
  goods sold Net income from income-producing activities is 
  taxable if the activities: 
  n constitute a trade or business; 
  n are regularly carried on; and 
  n are not substantially related to the organization’s  
   exempt purpose
  Special rules for organizations exempt under sections 501(c)
  (7), (9), (17), and (19) are described in Publication 598, Tax on 
  Unrelated Business Income of Exempt Organizations
  A tax-exempt organization must pay quarterly estimated tax 
  on unrelated business income if it expects its tax for the year 
  to be $500 or more Form 990-W, Estimated Tax on Unrelated 
  Business Taxable Income for Tax-Exempt Organizations, is a 
  worksheet to determine the amount of estimated tax pay-
  ments required 
  Exceptions and Special Rules,
  Income from certain business activities are excepted from the 
  definition of unrelated business income Earnings from these 
  sources are not subject to the unrelated business income tax 
  Exceptions generally include business income from:

10

n activities, including fundraisers, that are conducted by  
 volunteer workers, or where donated merchandise is sold; 
n qualified conventions and trade shows;
n qualified sponsorship payments; and 
n qualified bingo games
Income from investments and certain “passive” activities are 
usually excluded from the calculation of unrelated business 
activity Examples of this type of income include earnings from 
routine investments such as certificates of deposit, savings 
accounts, or stock dividends, royalties, certain rents from real 
property, and certain gains or losses from the sale of property
Special rules apply to income derived from real estate or other 
investments purchased with borrowed funds Such income is 
called “debt-financed” income Debt-financed income gener-
ally is subject to the unrelated business income tax 
See also Publication 598, Tax on Unrelated Business Income 
of Exempt Organizations for special rules for organizations 
exempt under sections 501(c)(7), (9), and (17)

Patient Protection and Affordable Care Act (ACA) Small 
Business Health Care Tax Credit Reported on Form 990-T,
For the years 2010 to 2013, many small tax-exempt  
organizations that provide health insurance coverage to  
their employees may qualify for a special tax credit A  
small tax-exempt employer may be entitled to a maximum 
credit of 25% of the employer’s health insurance premium  
expenses Eligible small tax-exempt employers described in 
Code section 501(c) may claim the refundable credit by filing 
a Form 990-T with an attached Form 8941 showing the  
calculation of the claimed credit A tax-exempt employer is 
not eligible to claim the credit unless it is an organization 
described in Code section 501(c) that is exempt from tax 
under Code section 501(a) Consult IRS.gov for further  
information

FORM 990-T FILING PENALTIES ,
An organization may be subject to interest and penalty charges  
if it files a late return, fails to pay tax when due, or fails to pay 
estimated tax, if required. 

                                                                      11

  Proxy Tax Reported on Form 990-T,
  The Code imposes reporting and notice requirements on cer-
  tain tax-exempt organizations described in sections 501(c)(4) 
  other than veterans’ organizations, 501(c)(5) other than labor 
  organizations, and 501(c)(6) that incur nondeductible lobby-
  ing and political expenses See also Nondeductible Lobbying 
  and Political Expenditures on page 24 
  Organizations that do not provide notices of amounts of 
  membership dues allocable to nondeductible lobbying  
  and political campaign expenditures are subject to tax  
  (commonly called a proxy tax) under IRC section 6033(e)(2) 
  on the amount of the expenditures An organization must 
  report the tax on Form 990-T, Exempt Organization Business 
  Income Tax Return (and proxy tax under section 6033(e)), at 
  line 37 For information on computing the tax, please see the 
  Form 990-T instructions
  To learn about unrelated business income, refer to Publication  
  598, Tax on Unrelated Business Income of Exempt Organizations,  
  Form 990-T instructions, and Form 990-W instructions at 
  www.irs.gov

  Employment Tax Returns,
  Like other employers, all tax-exempt organizations that pay 
  wages to employees must withhold, deposit, and pay employ-
  ment tax, including federal income tax withholding and social 
  security and Medicare (FICA) taxes A tax-exempt organization 
  must withhold federal income and FICA taxes from employee 
  wages and pay FICA on each employee paid more than $100 

12

in wages during a calendar year To know how much income 
tax to withhold, an organization should have a Form W-4, 
Employee’s Withholding Allowance Certificate, on file for each 
employee Employment taxes are reported on Form 941, 
Employer’s Quarterly Federal Tax Return 
If a small employer (one who has withheld employment taxes 
of $1,000 or less during the year) has been instructed by 
IRS to file Form 944, Employer’s Annual Federal Tax Return, 
instead of Form 941, the employer must do so The employer 
must File Form 944 even if there is no tax due or if the taxes 
exceed $1,000 unless IRS tells it to file Form 941 (or it is filing 
a final return) See the instructions to Form 944 for informa-
tion on how to have the filing requirement changed from 
Form 944 to Form 941 
Any organization that fails to withhold and pay employment 
tax may be subject to penalties In addition, if an individual 
responsible for collecting and paying over employment taxes 
willfully fails to so do, that person may be found personally 
liable for the trust fund taxes (employees’ withholding and 
their part of the FICA taxes) 
Tax-exempt organizations (other than those described 
in 501(c)(3)) are also liable for tax under the Federal 
Unemployment Tax Act (FUTA) for each employee whose 
wages are $50 or more during a calendar quarter if, during 
the current or preceding tax year, the organization had one  
or more employees at any time in each of 20 calendar weeks 
or the organization paid wages of $1,500 or more in any  
calendar quarter 
Tax-exempt organizations do not generally have to withhold 
or pay employment tax on payments to independent contrac-
tors, but they may have information reporting requirements 
If an organization incorrectly classifies an employee as an 
independent contractor, it may be held liable for employment 
taxes for that worker 
The requirements for withholding, depositing, reporting and  
paying employment taxes are explained in Publication 15,  
Circular E, Employer’s Tax Guide For help in determining if  
workers are employees or independent contractors, see 
Publication 15-A, Employer’s Supplemental Tax Guide 
Publication 557, Tax-Exempt Status for Your Organization,  
covers the employment tax responsibilities of public charities 
These IRS publications can be downloaded at www.irs.gov

                                                                    13

  Why keep records?

  In general, a tax-exempt organization must maintain books 
  and records to show that it complies with tax rules The organ-
  ization must be able to document the sources of receipts and 
  expenditures reported on Form 990, Return of Organization 
  Exempt From Income Tax or Form 990-EZ, Short Form Return 
  of Organization Exempt From Income Tax, and Form 990-T, 
  Exempt Organization Business Income Tax Return See Prepare 
  Annual Information and Tax Returns, right 
  If an organization does not keep required records, it may not 
  be able to show that it qualifies for tax-exempt status Thus, 
  the organization may lose its tax-exempt status In addition, a 
  tax-exempt organization may not be able to complete its returns 
  accurately and may be subject to penalties described under Filing 
  Penalties and Revocation of Tax-Exempt Status on page 9 
  When good recordkeeping systems are in place, a tax-exempt 
  organization can evaluate the success of its programs, monitor  
  its budget, and prepare its financial statements and returns

  Evaluate Programs,
  A tax-exempt organization can use records to evaluate the  
  success of its programs and determine whether they are 
  achieving desired results Good records can also help an  
  organization identify problem areas and determine what 
  changes it may need to make to improve performance

  Monitor Budgetary Results,
  Without proper financial records, it is difficult for a tax-exempt 
  organization to assess whether the organization has been 
  successful in adhering to budgetary guidelines The ability to 

14

monitor income and expenses and ensure that the organi-
zation is operating within its budget is crucial to successful 
stewardship of a tax-exempt organization 

Prepare Financial Statements,
It is important to maintain sufficient financial information  
in order to prepare accurate and timely annual financial  
statements A tax-exempt organization may need these  
statements when it is working with banks, creditors,  
contributors, and funding organizations Some states  
require tax-exempt organizations to make audited financial 
statements publicly available 

Prepare Annual Information and Tax Returns ,
Records must support income, expenses, and credits reported 
on Form 990 series and other tax returns Generally, these 
are the same records used to evaluate programs and prepare 
financial statements Books and records of tax-exempt organ-
izations must be available for inspection by the IRS If the IRS 
examines a tax-exempt organization’s returns, the organiza-
tion must have records to explain items reported Having a 
complete set of records will speed up the examination

Identify Sources of Receipts  ,
Tax-exempt organizations may receive money or property 
from many sources With thorough recordkeeping, an organ-
ization can identify the sources of receipts Organizations 
need this information to separate program from non-program 
receipts, taxable from non-taxable income and to complete 
appropriate schedules of Form 990

Substantiate Revenues, Expenses and Deductions  
for Unrelated Business Income Tax (UBIT) Purposes ,
A tax-exempt organization may need records to substantiate 
the amount, if any, of unrelated business taxable income An 
organization must appropriately track the financial revenues 
and expenses subject to UBIT reporting in order to prepare 
its unrelated business income tax return, Form 990-T, Exempt 
Organization Business Income Tax Return
In addition to maintaining required records relating to  
unrelated business taxable income, section 501(c)(9) organ-
izations (VEBAs) must also maintain records indicating the 
amount contributed by each member and contributing 
employer, and the amount and type of benefits paid by the 
organization for each member

                                                                15

  What records should be kept?

  Except in a few cases, the law does not require a special  
  kind of record A tax-exempt organization can choose any 
  recordkeeping system, suited to its activities, that clearly 
  shows the organization’s income and expenses The types of 
  activities a tax-exempt organization conducts determines the 
  type of records that should be kept for federal tax purposes 
  A tax-exempt organization should set up a recordkeeping 
  system using an accounting method that is appropriate for 
  proper monitoring and reporting of its financial activities for 
  the tax year If a tax-exempt organization has more than one 
  program, it should ensure that the records appropriately  
  identify the income and expense items that are attributable  
  to each program
  A recordkeeping system should generally include a summary 
  of transactions This summary is ordinarily written in the  
  tax-exempt organization’s books (for example, accounting 
  journals and ledgers)The books must show gross receipts, 
  purchases, expenses (other than purchases), employment 
  taxes, and assets For most small organizations, the check-
  book might be the main source for entries in the books while 
  larger organizations would need more sophisticated ledgers 
  and records A tax-exempt organization must keep docu-
  mentation that supports entries in the books

  Accounting Periods and Methods,
  Tax-exempt organizations must keep their financial records 
  based on an annual accounting period, called a tax year, in 
  order to comply with annual reporting requirements
  Accounting Periods — A tax year is usually 12 consecutive 
  months There are two kinds of tax years
  calendar tax year – This is a period of 12 consecutive months 
  beginning January 1 and ending December 31.
  fiscal tax year – This is a period of 12 consecutive months ending 
  on the last day of any month except December.

16

Accounting Method — An accounting method is a set of rules 
used to determine when income and expenses are reported A 
tax-exempt organization chooses an accounting method when 
it files its first annual return There are two basic accounting 
methods:
cash method – Under the cash method, a tax-exempt organiza-
tion reports income in the tax year received. It usually deducts  
expenses in the year paid.
accrual method – Under an accrual method, a tax-exempt  
organization generally records income in the tax year earned,  
(i.e., in the tax year in which a pledge is received, even though  
it may receive payment in a later year.) It records expenses in the 
tax year incurred, whether or not it pays the expenses that year.
For more information about accounting periods and methods, 
see Publication 538, Accounting Periods and Methods, and the 
instructions to Form 990 and Form 990-EZ

Supporting Documents,
Organization transactions such as contributions, purchases, 
sales, and payroll will generate supporting documents These 
documents—grant applications and awards, sales slips, paid 
bills, invoices, receipts, deposit slips, and canceled checks—
contain information to be recorded in accounting records It 
is important to keep these documents because they support 
the entries in books and the entries on tax and information 
returns Tax-exempt organizations should keep supporting 
documents organized by year and type of receipt or expense 
Also, keep records in a safe place

                                                                    17

  RECORDS MANAGEMENT,

  GROSS RECEIPTS,
  Gross receipts are the amounts received from all sources,  
  including contributions. A tax-exempt organization should  
  keep supporting documents that show the amounts and sources 
  of its gross receipts. Documents that show gross receipts include: 
  donor correspondence, pledge documents, cash register tapes, 
  bank deposit slips, receipt books, invoices, credit card charge  
  slips, and Forms 1099-MISC, Miscellaneous Income.

  PURCHASES, INCLUDING  
  ACCOUNTING FOR INVENTORY,
  Purchases are items bought, including any items resold to  
  customers. If an organization produces items, it must account for 
  any items resold to customers. Thus, for example, the organization 
  must account for the cost of all raw materials or parts purchased 
  for manufacture into finished products. Supporting documents 
  should show the amount paid, and that the amount was for 
  purchases. Documents for purchases include: canceled checks, 
  cash register tape receipts, credit card sales slips, and invoices. 
  These records will help an organization determine the value of its 
  inventory at the end of the year. See Publication 538, Accounting 
  Periods and Methods, for general information on methods for 
  valuing inventory.

  EXPENSES,
  Expenses are the costs a tax-exempt organization incurs (other 
  than purchases) to carry on its program. Supporting documents 
  should show the amount paid and the purpose of the expense. 
  Documents for expenses include: canceled checks, cash register 
  tapes, contracts, account statements, credit card sales slips,  
  invoices, and petty-cash slips for small cash payments. 

  EMPLOYMENT TAX RECORDS,
  Organizations that have employees must keep records of  
  compensation and specific employment tax records. Information 
  related to independent contractors should also be maintained.  
  See Publication 15, Circular E, Employer’s Tax Guide, for details.

18

ASSETS & LIABILITIES,
Assets are the property, (such as investments, buildings,  
and furniture) an organization owns and uses in its activities. 
Liabilities reflect the financial obligations of the organization.  
A tax-exempt organization must keep records to verify certain 
information about its assets and liabilities. Records should show:
n when and how the asset was acquired,
n whether any debt was used to acquire the asset,
n documents that support mortgages, notes,  
   loans or other forms of debt,
n purchase price,
n cost of any improvements,
n deductions taken for depreciation, if any,
n deductions taken for casualty losses, if any,  
   such as losses resulting from fires or storms,
n how the asset was used,
n when and how the asset was disposed of,
n selling price,
n expenses of sale,

Documents that may show the above information include:  
purchase and sales invoices, real estate closing statements,  
canceled checks, and financing documents. If a tax-exempt  
organization does not have canceled checks, it may be able  
to show payment with certain financial account statements  
prepared by financial institutions. These include account  
statements prepared for the financial institution by a third  
party. All information, including account statements, must be  
legible. The following defines acceptable account statements.

IF payment is by:           THEN statement must show:
check  ,                    check number, amount, payee’s            
                            name, and date the check amount          
                            was posted to the account by the         
                            financial institution,
electronic funds transfer  ,amount transferred, payee’s  
                            name, and date the transfer was          
                            posted to the account by the             
                            financial institution,
credit card  ,              amount charged, payee’s name,            
                            and transaction date,

                                                                     19

  How long should records be kept?

  Tax-exempt organizations must keep records for federal tax 
  purposes for as long as they may be needed to document evi-
  dence of compliance with provisions of the Code Generally, 
  this means the organization must keep records that support 
  an item of income or deduction on a return until the statute 
  of limitations for that return runs The statute of limitations 
  has run when the organization can no longer amend its return 
  and the IRS can no longer assess additional tax Generally, 
  the statute of limitations runs three years after the date the 
  return is due or filed, whichever is later An organization may 
  be required to retain records longer for other legal purposes, 
  including state or local tax purposes

  Record Retention Periods, 
  Record retention periods vary depending on the types of 
  records and returns
  Permanent Records – Some records should be kept permanent-
  ly These include the application for recognition of tax-exempt 
  status, the determination letter recognizing tax-exempt status, 
  and organizing documents, such as articles of incorporation and 
  by-laws, with amendments, as well as board minutes
  Employment Tax Records – If an organization has employees, 
  it must keep employment tax records for at least four years 
  after the date the tax becomes due or is paid, whichever is later
  Records for Non-Tax Purposes – When records are no longer 
  needed for tax purposes, an organization should keep them 
  until they are no longer needed for non-tax purposes For exam-
  ple, a grantor, insurance company, creditor, or state agency 
  may require that records be kept longer than the IRS requires

  How should changes be reported to the IRS?

  Reporting Changes on the Annual Information Return,
  A tax-exempt organization that is required to file Form 990 or 
  Form 990-EZ must report name, address, structural and oper-
  ational changes on its annual return Regardless of whether 
  a tax-exempt organization files an annual information return, 
  it may report these changes to the EO Determinations Office 
  at the mailing address set out in How to get IRS assistance 

20

and information at the end of this publication; however, 
such reporting does not relieve the organization from  
reporting the changes on its annual return
Tip: Attach copies of any signed or state certified articles  
of incorporation, or association, constitution or trust instru-
ment or other organizational document, or the by-laws or 
other governing document showing changes to your return  
If signed or state certified copies of a governing document  
are not available, an authorized officer may certify that the 
governing document provided is a complete and accurate 
copy of the original document

Determination Letters and Private Letter Ruling Requests,
A tax-exempt organization may request a copy of a lost 
exemption letter or an updated exemption letter that reflects 
a name or address change from the EO Determinations office 
See How to get IRS assistance and information, page 26, 
for the appropriate address for the EO Determinations office
An organization may request a determination letter regard-
ing the effect of certain changes on its tax-exempt status in 
certain specific situations set out in Revenue Procedure  
2009-4, updated annually However, the IRS will not make  
any determination regarding any completed transaction 
If a tax-exempt organization is unsure about whether a  
proposed change in its purposes or activities is consistent  
with its status as an exempt organization, it may want to 
request a private letter ruling
The IRS issues private letter rulings on proposed transac-
tions and on completed transactions if the request is submitted 
before the return is filed for the year in which the transaction 
was completed The IRS generally does not issue rulings to 
tax-exempt organizations on completed transactions The IRS 
will issue letter rulings to a tax-exempt organization on mat-
ters involving an organization’s exempt status, as well as other 
matters including issues under sections 501 through 514, 
4958, 6033, 6104, 6113 and 6115 However, the Service may 
decline to issue a ruling on certain matters
Consult www.irs.gov/eo for the appropriate procedures for 
preparing and submitting requests for private letter rulings, 
determination letters, a replacement exemption letter or  
a letter reflecting a new name and address For general  
information about reporting changes, you may contact EO 
customer service at (877) 829-5500

                                                                 21

  What disclosures are required?

  There are a number of disclosure requirements for tax-exempt 
  organizations Detailed information on federal tax law disclo-
  sure requirements for tax-exempt organizations can be found 
  in Publication 557, Tax-Exempt Status for Your Organization, on 
  the IRS Charities and Non-Profits Web site at www.irs.gov/eo 
  Information about disclosure requirements for 501(c)(3) orga-
  nizations may be found in Publication 4221-PC, Compliance 
  Guide for 501(c)(3) Public Charities and Publication 4221-PF, 
  Compliance Guide for 501(c)(3) Private Foundations 

  Public Inspection of Exemption Applications  
  and Annual Returns,
  A tax-exempt organization must make the following documents 
  available for public inspection and copying upon request  
  and without charge (except for a reasonable fee for copying)  
  The IRS also makes these documents available for public 
  inspection and copying Because certain forms by law must  
  be made publicly available by the IRS and the filer, do not 
  include any personal identifying information, such as social 
  security numbers not required by the IRS, on these forms 
  Exemption Application – A non-501(c)(3) tax-exempt  
  organization must make available for public inspection its 
  exemption application, Form 1024, Application for Recognition 
  of Exemption Under Section 501(a), along with each of the  
  following documents:
  n all documents submitted with Form 1024;
  n all documents the IRS requires the organization to submit  
   in support of its application; and
  n the exemption ruling letter issued by the IRS
  Annual Information Return – A tax-exempt organization must 
  disclose its annual information return (Form 990 series) with 
  schedules, attachments, and supporting documents filed with 
  the IRS The organization may not disclose the names and 
  addresses of contributors listed on Schedule B of Form 990 
  However, other information on Schedule B is open for public 
  inspection unless it clearly identifies the contributor Returns 
  need to be available for public inspection for only three years 
  after the due date or filing date of the return (or the filing date 
  of an amended return)
  Disclosure Procedures – A tax-exempt organization may  
  place reasonable restrictions on the time, place, and manner  

22

of in-person inspection and copying, and may charge a rea-
sonable fee for providing copies It can charge no more for the 
copies than the per page rate the IRS charges for providing 
copies See www.irs.gov/foia/index.html for current IRS copying 
fees Although the IRS charges no fee for the first 100 pages, 
the organization can charge a fee for all copies The organiza-
tion can also charge the actual postage costs it pays to provide 
copies A tax-exempt organization does not have to comply 
with individual requests for copies if it makes the documents 
widely available This can be done by posting the documents on 
a readily accessible Web site For details on disclosure rules and 
procedures for non-501(c)(3) tax-exempt organizations, see the 
Life Cycles of section 501(c)(4), (5) and (6) organizations and 
the instructions to Forms 990 and 1024 at www.irs.gov/eo 
All publicly-available information may be obtained from the IRS 
for a fee by using Form 4506-A, Request for Public Inspection or 
Copy of Exempt or Political Organization IRS Form An organiza-
tion may obtain a complete copy of its own application by filing 
Form 4506, Request for Copy of Tax Return

Sale of Free Government Information,
If a tax-exempt organization offers to sell, or solicits money for, 
goods, information or services that are available free from the 
federal government, the organization must make an express 
statement at the time of solicitation about the free service  
An organization that intentionally disregards this requirement  
is subject to a penalty

Solicitation Notice ,
Certain tax-exempt organizations that are not eligible to receive 
tax-deductible contributions must disclose, in any fundraising 
solicitation, in an express statement (in a conspicuous and eas-
ily recognizable format), that contributions to the organization 
are not deductible for federal income tax purposes This applies 
to organizations that are not eligible to receive deductible char-
itable contributions and are described in sections 501(c), 501(d) 
and 527 Safe harbors for meeting these requirements are set 
out in Notice 88-120, 1988-2 CB 454 

PENALTIES,
Penalties apply to organizations that do not comply with disclosure 
requirements and to persons responsible for the failure to comply.

                                                                    23

  This disclosure requirement applies to a fundraising solicita-
  tion: if the organization soliciting the funds normally has gross 
  receipts over $100,000 per year, the solicitation is part of a 
  coordinated fundraising campaign that is soliciting more than 
  ten persons during the year, and the solicitation is made in 
  written or printed form, by television or radio, or by telephone
  Note: If an organization fails to include the required disclosure of  
  the non-deductibility of contributions in fundraising solicitations,  
  a penalty of $1,000 for each day on which such a failure occurs,  
  up to a maximum annual penalty of $10,000, may be imposed. No  
  penalty will be imposed if the failure is due to reasonable cause.  
  In cases where the failure to make the required disclosure is due  
  to intentional disregard of the law, the $10,000 per year limitation  
  does not apply and more severe penalties based on up to 50 percent 
  of the aggregate cost of the solicitations are applicable.

  Nondeductible Lobbying and Political Expenditures,
  A tax-exempt organization must notify anyone paying dues 
  that any portion used for lobbying or political activities is not 
  deductible An organization must provide the notice if it is one 
  of the following:
  n a social welfare organization described in section 501(c)(4) 
   that is not a veterans organization;
  n an agricultural or horticultural organization described in  
    section 501(c)(5); or
  n a business league, chamber of commerce, real estate board, 
   or other organization described in section 501(c)(6)
  Nondeductible lobbying and political expenditures include 
  expenditures paid or incurred in connection with influencing  
  legislation, participating or intervening in any political cam-
  paign on behalf of (or in opposition to) any candidate for 
  public office, attempting to influence the general public with 
  respect to elections, legislative matters, or referendums; and 
  any direct communication with a covered executive branch 
  official in an attempt to influence the person’s official actions 
  or positions 
  If an organization is subject to the reporting and notice 
  requirement it has several options: 
  n It may provide a notice to its members when they pay dues 
   that contains a reasonable estimate of the amount allocable 
   to lobbying and political expenditures;
  n If it does not give notification, it must pay a proxy tax at the 
   highest corporate rate imposed by the Code (currently 35%) 
   on its lobbying and political campaign expenditures up to the 
   amount of dues and similar payments received by the organi-
   zation during the tax year; or

24

n If the organization does provide notices to its members but 
 underestimates the actual amount of lobbying and political 
 campaign expenditures, it is subject to the proxy tax on the 
 excess lobbying expenditures paid during the tax year that 
 were not included in the notices However this tax may be 
 waived if the organization agrees to include the excess lob-
 bying and political campaign expenditures in the following 
 year’s notices
An organization described above does not have to provide the 
notice if it establishes that substantially all the dues paid to it 
are not deductible (regardless of whether those dues are used 
for lobbying or political activities) anyway or if certain other 
conditions are met 
If an organization elects the proxy tax option, it must report 
the tax on Form 990-T, as described on page 12, in Proxy Tax 
Reported on Form 990-T

Charitable Contributions ,
In general, contributions to 501(c) organizations other than 
organizations described in section 501(c)(3) of the Code are 
NOT deductible as charitable contributions for federal income 
tax purposes Donations to certain non-501(c)(3) organiza-
tions are deductible as charitable contributions 
These include donations to: 
n 501(c)(4) fire companies (for public purposes), 
n cemetery companies which are not earmarked  
for the care of a particular lot or crypt,
n fraternal organizations for certain 501(c)(3)  
purposes, and 
n veterans’ organizations (if 90% or more of the  
organizations are war veterans)
In addition, a non-501(c)(3) tax-exempt organization may 
establish a charitable fund, contributions to which are deduct-
ible However, such a fund itself must meet the requirements 
of section 501(c)(3) and the related notice requirements of 
section 508(a) 
If the contributions are deductible as charitable contributions, 
substantiation and disclosure requirements may apply Read 
Publication 1771, Charitable Contributions—Substantiation 
and Disclosure Requirements, and Publication 526, Charitable 
Contributions, for details on the federal tax law for organiza-
tions that may receive tax-deductible charitable contributions 
and for taxpayers who make contributions 

                                                                    25

                                  501

  How to get  
  IRS assistance  
  and information,

  The IRS offers help that is accessible  
  either online, via mail by telephone,  
  and at IRS walk-in offices in many  
  areas across the country IRS forms  
  and publications can be downloaded  
  from the Internet and ordered                    (a)
  by telephone

  Specialized Assistance for  
  Tax-Exempt Organizations,
  Get help with questions about applying  
  for tax-exempt status, annual filing  
  requirements, and information about  
  exempt organizations through the IRS  
  Exempt Organizations (EO) 

  EO Web site  ,                                   www.irs.gov/eo,
  Highlights:
  n The Life Cycle of an Exempt Organization describes the 
    compliance obligations of section 501(c)(3), (4), (5) and 
    (6) organizations 
  n Information on Other Non-Profits
  n Subscribe to the EO Update, an electronic newsletter  
    with information for tax-exempt organizations and tax 
    practitioners who represent them
  Web based training                         , www.stayexempt.org,
  Web based                      n Employment Issues,
  training modules:              n Form 990,
  n Tax Exempt Status,           n Required Disclosures,
  n Unrelated  
                                 Mini-Courses on  
  Business income,               topics of interest,

  EO Customer Service  ,                             (877) 829-5500,

  EO Determinations Office mailing address,
  Internal Revenue Service,
  TE/GE, EO Determinations Office,
  PO Box 2508,
  Cincinnati, OH 45201,
26

                               501

Tax Publications for Exempt Organizations ,
Get publications via the Internet or by calling the IRS  
at (800) 829-3676 
Pub 15, Circular E, Employer’s Tax Guide  ,
Pub 15-A, Employer’s Supplemental Tax Guide,
Pub 463, Travel, Entertainment, Gift, and Car Expenses,
Pub 517, Social Security and Other Information for Members 
of the Clergy and Religious Workers,
Pub 538, Accounting Periods and Methods,
Pub 557, Tax-Exempt Status for Your Organization,
Pub 583, Starting a Business and Keeping Records,
Pub 598, Tax on Unrelated Business Income of  
Exempt Organizations,
Pub 1771, Charitable Contributions – Substantiation and 
Disclosure Requirements,
Pub 1828, Tax Guide for Churches and Religious Organizations,
Pub 3833, Disaster Relief, Providing Assistance Through 
Charitable Organizations,
Pub 4220, Applying for 501(c)(3) Tax-Exempt Status   ,
Pub 4221-PC, Compliance Guide for 501(c)(3) Public Charities,
Pub 4302, A Charity’s Guide to Vehicle Donations,
Pub 4303, A Donor’s Guide to Vehicle Donations,
Pub 4573, Group Exemptions,
Pub 4630, Exempt Organizations Products and  
Services Navigator,

Forms for Exempt Organizations 
Get forms via the Internet or by calling the IRS at  
(800) 829-3676
Form 941, Employer’s Quarterly Federal Tax Return,
Form 944, Employers Annual Federal Tax Return,
Form 990, Return of Organization Exempt From Income Tax,
Form 990-EZ, Short Form Return of Organization Exempt  
From Income Tax,
Form 990-PF, Return of Private Foundation or Section  
4947(a)(1) Nonexempt Charitable Trust Treated as a  
Private Foundation,

                                                             27

  Form 990-N, Electronic Notice (e-Postcard) For Tax-Exempt 
  Organizations Not Required To File Form 990 or 990-EZ  
  (only available electronically),
  Form 990-T, Exempt Organization Business Income Tax Return,
  Form 990-W, Estimated Tax on Unrelated Business Taxable 
  Income for Exempt Organizations,
  Form 1023 , Application for Recognition of Exemption  
  Under Section 501(c)(3) of the Internal Revenue Code,
  Form 1024 , Application for Recognition of Exemption  
  Under Section 501(a)  ,
  Form 1041, U.S. Income Tax Return for Estates and Trusts,
  Form 4506, Request for Copy of Tax Return,
  Form 4506-A, Request for Public Inspection or Copy of 
  Exempt or Political Organization IRS Form,
  Form 4720, Return of Certain Excise Taxes Under  
  Chapters 41 and 42 of the Internal Revenue Code  ,
  Form 5578, Annual Certification of Racial Non-Discrimination 
  for a Private School Exempt from Federal Income Tax,
  Form 5768 , Election/Revocation of Election by an Eligible 
  Section 501(c)(3) Organization To Make Expenditures to 
  Influence Legislation,
  Form 8282 , Donee Information Return ,
  Form 8283, Noncash Charitable Contributions,
  Form 8868, Extension of Time To File an Exempt  
  Organization Return,

  General IRS Assistance
  Get materials on the latest tax laws, assistance with forms  
  and publications, and filing information
  IRS Web site  ,                         www.irs.gov,
  Federal tax questions  ,                (800) 829-4933,
  Employment tax questions  ,             (800) 829-4933,
  Order IRS forms and publications ,      (800) 829-3676 ,

28

                     Tax-Exempt Organization Reference Chart           ,

                                                              Annual 
 Code                 Type of          Type of                 Filing        Contributions 
 Section  Organization , Activities ,                 ,       Requirement  , Deductible,

 501(c)(1),   Instrumentalities       Corporate              none,           Yes, if  
              of the                  instrumentalities                      for public 
              United States,          of the United States                   purposes,
                                      organized under an 
                                      Act of Congress,
 501(c)(2)  , Title Holding           Holds title to         990,            No,
              Corporation             exempt organization    990-EZ,  
              for Exempt              property. Collects and 990-N,
              Organizations,          pays income from 
                                      property to exempt 
                                      organization,
                                                              
 501(c)(3),   Religious,              Activities of          990,            Yes,  
              Educational,            nature implied by      990-EZ,         generally
              Charitable,             description of class   990-N,          (testing for 
              Literary, Testing       of organizations,      990-PF,         public safety 
              for Public Safety,                                             excluded),
              to Foster National 
              or International 
              Amateur Sports 
              Competition, 
              or Prevention 
              of Cruelty to 
              Children or Animals 
              Organizations,
                                                                              
 501(c)(4)  , Civic Leagues,          Promotion of           990,            No,  
              Social Welfare          community              990-EZ,         generally,
              Organizations,          welfare; charitable,   990-N,
                                      educational or  
                                      recreational,
                                                              
 501(c)(5)  , Labor, Agricultural     Educational or         990,            No,
              and Horticultural       instructive, the       990-EZ,
              Organizations,          purpose being to       990-N,
                                      improve conditions  
                                      of work and  
                                      improve products  
                                      or efficiency,
                                                              
 501(c)(6)  , Business Leagues,       Improvement of         990,            No,
              Chambers of             business conditions    990-EZ,
              Commerce, Real          of one or more         990-N,
              Estate Boards,          lines of business,
                                       
 501(c)(7)  , Social and              Pleasure,              990,            No,
              Recreational Clubs,     recreation, social     990-EZ,
                                      activities,            990-N,
 501(c)8),    Fraternal Beneficiary   Provides for payment   990,            Yes, if  
              Societies, Orders or    of life, sickness,     990-EZ,         for certain 
              Associations,           accident or other      990-N,          (c)(3)  
                                      benefits to members,                   purposes,

                                                                                      29

                                                               Annual 
  Code                Type of           Type of                 Filing        Contributions 
 Section  Organization ,  Activities ,                 ,       Requirement  , Deductible,
       
 501(c)(9),    Voluntary               Provides for           990,            No,
               Employees’              payment of life,       990-EZ,
               Beneficiary             sickness, accident     990-N,
               Associations            or other benefits  
               (VEBA),                 to members,  
                                       dependents or  
                                       beneficiaries,
                                                               
 501(c)(10),   Domestic Fraternal      Lodge devoting         990,            Yes, if for 
               Societies, Orders       its net earnings to    990-EZ,         certain 
               or Associations  ,      charitable, fraternal  990-N,          (c)(3)  
                                       or other specified                     purposes,
                                       purposes. No life, 
                                       sickness or accident                    
                                       benefits to members,
                                                                               
 501(c)(11),   Teachers’               Local teachers’        990,            No,
               Retirement Funds,       association for pay-   990-EZ,
                                       ment of retirement     990-N,           
                                       benefits funded from 
                                       specific sources,
                                                               
 501(c)(12),   Local Benevolent        Conducts activities    990,            No,
               Life Insurance          of a mutually          990-EZ,
               Associations, Mutual    beneficial nature      990-N,
               Ditch or Irrigation     similar to those 
               Companies, Mutual       implied by the 
               or Cooperative          description of the 
               Electric or Telephone   class of organization,
               Companies, and  
               Like Organizations,
                                        
 501(c)(13),   Cemetery                Provides burial and    990,            Yes,  
               Companies,              incidental services,   990-EZ,         generally,
                                                              990-N,
                                                                               
 501(c)(14)  , State Chartered         Operates without       990,            No,
               Credit Unions,          profit for mutual      990-EZ,
                                       benefit of its         990-N,
                                       members,
                                                                               
 501(c)(15)  , Small Insurance         Provides insurance     990,            No,
               Companies or            to members             990-EZ,
               Associations,           substantially at cost, 990-N,
                                                                               
 501(c)(16)  , Cooperative             Finances crop          990,            No,
               Organizations           operations in          990-EZ,
               to Finance Crop         conjunction with       990-N,
               Operations,             activities of a  
                                       section 521  
                                       marketing or  
                                       purchasing  
                                       association,

  30

                                                              Annual 
  Code                Type of          Type of                 Filing         Contributions 
 Section  Organization , Activities ,               ,          Requirement  , Deductible  ,

 501(c)(17)  , Supplemental           Provides for payment    990,            No,
               Unemployment           of supplemental         990-EZ,
               Benefit Trusts,        unemployment com-       990-N,
                                      pensation benefits  
                                      as part of a plan,
                                                                               
 501(c)(18),   Employee Funded        Payment of pension      990,            No,
               Pension Trusts         or retirement benefits  990-EZ,
               (created before        under a plan funded     990-N,
               1959),                 only by employees,

 501(c)(19),   War Veterans           Activities implied      990,            No,  
               Organizations,         by nature of            990-EZ,         generally,
                                      organization,           990-N,
                                                                               
 501(c)(21)  , Black Lung             Irrevocable domestic    990-BL,         No,
               Benefit Trusts,        trust funded by coal 
                                      mine operators to 
                                      satisfy their liability 
                                      for disability or death 
                                      due to black lung 
                                      diseases,
                                                                               
 501(c)(22),   Withdrawal Liability   Provides funds          990,            No,
               Payment Fund,          to meet the liability   990-EZ,
                                      or employers            990-N,
                                      withdrawing from  
                                      a multiemployer  
                                      pension fund,
                                                                               
 501(c)(23)  , Veterans               Provides insurance      990,            No,  
               Organizations          and other benefits      990-EZ,         generally,
               (created before        to veterans,            990-N,
               1880),                                                          
                                                                               
 501(c)(25),   Title Holding          Holds title and         990,            No,
               Corporations or        pays over income        990-EZ,
               Trusts with Multiple   from real property      990-N,
               Parents,               to 35 or fewer  
                                      shareholders or  
                                      beneficiaries,
                                                                               
 501(c)(26),   State-Sponsored        Provides health care    990,            No,
               Organization           coverage to high risk   990-EZ,
               Providing Health       individuals,            990-N,
               Coverage for High- 
               Risk Individuals,
 501(c)(27),   State-Sponsored        Reimburses              990,            No,
               Worker’s               members for             990-EZ,
               Compensation           losses under            990-N,
               Reinsurance            local workers’  
               Organization,          compensation acts,

                                                                                   31

                                                                    Annual 
   Code               Type of                Type of                 Filing        Contributions 
 Section  Organization ,       Activities ,                 ,       Requirement  , Deductible,

 501(c)(28),         National Railroad      Manages and invests    Not             No,
                     Retirement             the assets of the      determined,
                     Investment             Railroad Retirement 
                     Trust,                 Account ,
                                                                    
 501(d),             Religious &            Communal religious     1065,           No,
                     Apostolic              community,
                     Organizations,
                                                                    
 501(e),             Cooperative            Performs specific      990,            Yes,
                     Hospital Service       activities for         990-EZ,
                     Organizations,         hospitals on a         990-N,
                                            centralized basis,
                                                                                    
 501(f),             Cooperative            Performs collective    990,            Yes,
                     Service                investment services    990-EZ,
                     Organizations          for educational        990-N,
                     of Operating           organizations,
                     Educational 
                     Organizations,
                                                                                    
 501(k)  ,           Child Care             Provides care          990,            Yes,
                     Organizations,         for children of        990-EZ,
                                            working parents.       990-N,
                                            Open to public,
                                                                                    
 501(n),             Charitable             Pools certain          990,            Yes,
                     Risk Pools,            insurance risks        990-EZ,
                                            of 501(c)(3)s,         990-N,
 521(a)  ,           Farmers’               Cooperative            1120-C,         No,
                     Cooperative            marketing and  
                     Organizations,         purchasing for          
                                            agricultural  
                                            procedures,
                                                                    
 527,                Political              A party, committee,    1120-POL,       No,
                     Organizations,         fund, association,     990 or  
                                            etc., that directly or 990EZ,
                                            indirectly accepts con-
                                            tributions or makes 
                                            expenditures for 
                                            political campaigns,

  Note that neither this chart nor this publication is intended to be a com-
  prehensive source of information about the compliance responsibilities 
  of all tax-exempt organizations. Also, an organization exempt under a 
  subsection of Section 501 other than section 501(c)(3) may establish a 
  separate charitable fund, contributions to which are deductible. Such a 
  fund must meet the requirements of section 501(c)(3) and the related 
  notice requirements of section 508(a). See Publication 4220, Applying for 
  501(c)(3) Tax-Exempt Status and Publication 557, Tax-Exempt Status for 
  Your Organization.
 32

33

Publication 4221-NC ,(Rev. 12-2010)  , Catalog Number, 52447N,
Department of the Treasury ,Internal Revenue Service , 
                     www.irs.gov