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Common Tax Law Restrictions on Activities of Exempt Organizations

The chart below compares seven federal tax law attributes of five common types of tax-exempt organizations.

 
 

501(c)(3)

501(c)(4) 501(c)(5) 501(c)(6) 527
 Receive tax-deductible charitable contributions

YES 

NO 

 NO 

NO  

 NO 

 Receive contributions or fees deductible as a business expense

YES  

YES  

YES  

YES  

 NO 

 Substantially related income exempt from federal income tax YES   YES   YES   YES   YES 
 Investment income exempt from federal income tax

 LTD*

 YES 

 YES 

 YES 

 NO 

 Engage in legislative advocacy LTD  YES    YES   YES   LTD 
 Engage in candidate election advocacy NO    LTD   LTD   LTD  YES  
 Engage in public advocacy not related to legislation or election of candidates YES   YES    YES   YES   LTD 
           

*Private foundations are subject to tax on their net investment income.

 

Page Last Reviewed or Updated: 11-Apr-2014