In addition to annual return requirements, exempt organizations are required to file certain returns and reports and make disclosures. If an attorney or other representative will represent your organization in connection with these filings, see Power of Attorney.

Jeopardizing Exemption

A section 501(c)(3) organization will jeopardize its exemption if it ceases to be operated exclusively for exempt purposes. An organization is operated exclusively for exempt purposes only if it engages primarily in activities that accomplish the exempt purposes specified in section 501(c)(3). An organization will not be so regarded if more than an insubstantial part of its activities does not further an exempt purpose.

Employment Taxes

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.

Charitable Contributions

A benefit of having 501(c)(3) status is eligibility to receive tax-deductible charitable contributions. Note that the Internal Revenue Code applies substantiation requirements for donors, and disclosure requirements for charitable organizations, in connection with such contributions. For a detailed discussion of the substantiation and disclosure requirements for charitable contributions, see Publication 1771, Charitable Contributions: Substantiation and Disclosure Requirements.PDF.

Public Disclosure Requirements

In addition to these disclosure requirements for charitable contributions, the law requires tax-exempt organizations to make key documents publicly available.  The IRS also makes certain documents available.  For more information, see Public Disclosure.

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.

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