Information For...

For you and your family
Standard mileage and other information

Forms and Instructions

Individual Tax Return
Instructions for Form 1040
Request for Taxpayer Identification Number (TIN) and Certification
Request for Transcript of Tax Return


Employee's Withholding Allowance Certificate
Employer's Quarterly Federal Tax Return
Employers engaged in a trade or business who pay compensation
Installment Agreement Request

Popular For Tax Pros

Amend/Fix Return
Apply for Power of Attorney
Apply for an ITIN
Rules Governing Practice before IRS

Inurement and Benefits to Members - Agricultural/Horticultural and Labor Organizations (IRC 501(c)(5))

An organization does not qualify for exemption as an agricultural/horticultural or labor organization under Internal Revenue Code section 501(c)(5) if any of its net earnings inures to the benefit of any member. What is inurement of earnings to a member of an agricultural or horticultural organization may not be inurement of earnings to a member of a labor organization.  For example, a labor organization may pay death, sick, accident, and similar benefits to members because paying such benefits serves the members' mutual interest in improving their shared working conditions. 

In contrast, the exempt purposes of an agricultural organization are to better the conditions of those engaged in agricultural pursuits generally, rather than to benefit individual members specifically.  Therefore, providing welfare aid and financial assistance to members is proscribed inurement for an exempt agricultural organization, but not for a labor organization.

Similarly, the concept of inurement under IRC section 501(c)(5) differs somewhat from that applied under section 501(c)(3) and 501(c)(4).

Incidental benefits

Members may receive incidental benefits from an organization's exempt activities.  For example, members may benefit incidentally when an organization provides data on milk production to an agricultural extension organization. That incidental benefit is not inurement, although providing the same information only to members might be inurement.


Return to Life Cycle of a Labor Organization

Return to Life Cycle of an Agricultural or Horticultural Organization