Talk:501(c)(4)

Untitled
The following material has been removed from the main article:


 * Unlike the more prevalent 501(c)(3) non-profits, donations generally to a 501(c)(4) are not exempt from payment of federal income taxes (unless it is a volunteer fire department or veteran organizations with at least 90% of their membership consisting of war veterans). The Internal Revenue Code is Title 26 of the United States Code.

I think what the author was trying to say was this:


 * Unlike donations to the more prevalent 501(c)(3) non-profit organizations, donations to a section 501(c)(4) organization are not deductible by the donor (as charitable contributions under section 170) unless the recipient organization is a volunteer fire department or veteran organizations with at least 90% of its membership consisting of war veterans.

I will try to check the statutes and regs to be sure that the revised wording is correct, and will then re-insert the corrected material in the article.

The point is: Exemption from Federal income tax under section 501 basically means that the RECIPIENT ORGANIZATION does not have to pay income tax on the portion of its income (generally, the donations it receives) that is related to its "charitable" purpose. By contrast, DEDUCTIBILITY refers to the right of the DONOR to deduct the charitable contribution it PAID (i.e., the other side of the transaction, if you will) as a charitable contribution under section 170. Famspear 06:19, 13 January 2006 (UTC)

501(c)(4) contribution deductibility
To my knowledge the code and regulations do not have the deductibility issues described above. I do know it is true though. Check out Rev. Rule 80-77 for the Volunteer fire department and Rev. Rule 84-140 for the veteran’s organization. If you don't have access to revenue rulings, check out http://www.taxlinks.com/. It is a free site to read revenue rulings off of.

Since the above described facts are true regarding deductibility, I am going to add it back to the article but also use the suggested language above. It does make more sense described that way. --Ashay8 05:03, 17 January 2006 (UTC)