Tax Planning and Compliance for Tax-Exempt Organizations, 6th Edition

CHAPTER 6Civic Leagues and Local Associations of Employees: §501(c)(4)

• 6.1 Comparison of (c)(3) and (c)(4) Organizations
  • (a) Revised Regulations
  • (b) New Filing Requirements
  • (c) Choosing to Apply Under (c)(4) Versus (c)(3)
  • (d) Affiliated (c)(3) and (c)(4) Organizations
  • (e) Conversion to (c)(3) Status
• 6.2 Qualifying and Nonqualifying Civic Organizations
  • (a) Limitation on Involvement with Political Candidates
• 6.3 Local Associations of Employees
  • (a) Membership Requirements
  • (b) Permissible Activities
• 6.4 Neighborhood and Homeowner's Associations
  • (a) Characteristics of Homeowner's Associations
  • (b) Calculating the Tax
  • (c) Annual Election
• 6.5 Disclosures of Nondeductibility
  • (a) Notice of Noncharity Status
  • (b) Dues Not Deductible as Business Expense
  • (c) Definition of Legislation
  • (d) Nondeductible Membership Dues
  • (e) Proxy Tax
  • (f) Excepted Organizations
  • (g) Cost of Lobbying
  • (h) Look-Back Rule

It is well-established that an organization may be created to carry out its purposes through the development and implementation of programs designed to have an impact on community, state, or national policymaking.¹ Environmental protection, housing, civil rights, aid to the poor, world peace, or other public issues may be involved. The pursuit of such subjects is the focus of both §§501(c)(3) and (c)(4) organizations. The term social welfare appears in the regulations defining charitable for (c)(3) purposes. This chapter focuses on the factors that distinguish a (c)(3) from a (c)(4) ...