Life Cycle of an Agricultural or Horticultural Organization - Ongoing Compliance
In addition to annual return requirements, exempt organizations must file certain returns and reports and make certain disclosures. If an attorney or other representative will represent your organization in connection with these filings, see Power of Attorney.
An agricultural or horticultural organization will jeopardize its exemption under Code section 501(c)(5) if it ceases to have as its objects the purposes described in that section: Bettering the conditions of persons engaged in the pursuit of agriculture or horticulture; improving the grade of their products; and developing a higher degree of efficiency in their respective occupations. In addition, an organization's net earnings may not inure to the benefit of its members. These organizations may conduct political campaign and lobbying activities furthering their exempt purposes, but may have to pay a proxy tax if they use member dues for this purpose.
Every employer, including an organization exempt from federal income tax, who pays wages to employees is responsible for withholding, depositing, paying, and reporting federal employment taxes (including federal income tax, social security and Medicare (FICA) taxes, and federal unemployment tax (FUTA)), unless that employer is specifically excepted by law from those requirements or if the taxes clearly do not apply. These taxes generally apply to payment of compensation to employees.
Contributions to agricultural or horticultural organizations are generally not deductible as charitable contributions.
Getting Help from the IRS
Exempt Organizations (EO) offers specialized assistance to tax-exempt organizations. EO's programs help these customers understand and comply with the tax laws and regulations governing exempt organizations. Please see Help from the IRS for more information.