Tax Exempt Organizations

About Tax Exempt Organizations

Tax exempt organizations in the US include charities, religious organizations, educational institutions, and social welfare organizations. Section 501 c of the Internal Revenue Code lists over 30 categories of tax exempt organizations. 501 c 3 charities can receive tax deductible donations. 501 c 4 social welfare organizations and 501 c 6 trade associations cannot. The distinction matters because 501 c 3 organizations are prohibited from political campaign activity, while 501 c 4 organizations can engage in some political activity. The IRS has been criticized for lax oversight of tax exempt organizations. The 2013 IRS targeting scandal involved scrutiny of groups with political sounding names applying for tax exemption. Dark money groups use 501 c 4 and 501 c 6 status to conduct political activity without disclosing donors.