Overview of Organizations Described in Section 501(c)(4)

How To Request Recognition of Tax-Exempt Status Under Section 501(c)(4) If you aren’t organized for profit and will be operated primarily to promote social welfare to benefit the community, you may qualify for exemption under section 501(c)(4).

A local association of employees may qualify for exemption under section 501(c)(4) if (1) membership is limited to the employees of a designated person or persons in a particular municipality, and (2) the net earnings of the association are devoted exclusively to charitable, educational, or recreational purposes.

Notice requirement. Every new section 501(c)(4) organization must use Form 8976, Notice of Intent to Operate Under Section 501(c)(4), to provide notice to the Internal Revenue Service. You must file Form 8976 within 60 days of formation. Providing notice on Form 8976 is not a determination that the IRS recognizes you as exempt under section 501(c)(4).

Optional application for recognition of exemption. You may (but are not required to) file Form 1024-A, Application for Recognition of Exemption under Section 501(c)(4), to apply for recognition of exemption from federal income tax under section 501(c)(4).

However, to have your tax-exempt status reinstated after your tax-exempt status was automatically revoked for failure to file a return or notice for 3 consecutive years, you must apply to have your tax-exempt status reinstated, even if you had not previously chosen to apply for recognition of exemption.

Requirements for Tax-Exempt Status Under Section 501(c)(4) To qualify for exemption under section 501(c)(4), no part of your net earnings can inure to the benefit of any private shareholder or individual. If you provide an excess benefit to certain persons, an excise tax may be imposed.