by The Virtual Attorney

Although section 501(c))(3) organizations are the best known non-profits, there are numerous other sections of the Internal Revenue Code that give tax exempt status to a wide array of other organizations.

So which types of organizations commonly fit into the exempt categories created by IRC 501(c)(4)-(27)? Among the most common are:

Civic Leagues, Social Welfare Nonprofit Organizations and Local Associations of Employees

Section 501(c)(3 permits an exemption for a civic league or nonprofit organization operated exclusively for the promotion of social welfare. It must engage primarily in activities to promote the common good and general welfare of people in the community, and not primarily provide benefits to its members. Political activity that is not the primary activity of the organization and not directed at particular candidates is permissible, as is lobbying if related to the organization’s exempt purpose. No part of the net earnings may inure to the benefit of any private shareholder or individual.

Trade and Professional Associations

Section 501(c)(6) provides an exemption to business leagues, chambers of commerce, real estate boards, boards of trade, and professional football leagues that are not organized for profit, and in which no part of the net earnings inure to the benefit of any private shareholder or individual. The organization must promote a common business interest of its members, who provide it with a meaningful level of support. Its activities should be directed to the improvement of business conditions of one or more lines of business, as distinguished from the performance of particular services for individual persons.

Social Clubs

Section 501(c)(7) permits an exemption for clubs organized for pleasure, recreation, and other nonprofitable purposes, if substantially all the activities are for such purposes, and no part of the net earnings inures to the benefit of any private shareholder. Membership must be limited, and use of club facilities by nonmembers must be restricted or the exemption may be lost. Additionally, the exemption will be lost if the organizations charter, bylaws, or other governing instrument or any of its written policy statements contain a provision that provides for discrimination against any person on the basis of race, color, or religion.

Labor, Agricultural and Horticultural Organizations

Section 501(c)(5) provides an exemption for labor, agricultural, and horticultural organizations. Such organizations need to have as their objectives the betterment of the conditions of persons engaged in the pursuits of labor, agriculture, or horticulture, the improvement of the grade of their products, and the development of a higher degree of efficiency in their respective occupations. The IRS has drawn narrow distinctions between furthering the interests of the organization’s members, which would support the exemption, and providing services to the members, which would not support the exemption.

Title-Holding Companies

Section 501(c)(2) provides an exemption to corporations that are organized for the exclusive purpose of holding title to property, collecting income from it, and turning over the entire amount of income, less expenses, to another tax exempt organization. Section 501(c)(25) exempts corporations and trusts organized for the exclusive purpose of acquiring and holding title to real property, collecting income from it, and turning over the entire amount of income, less expenses, to one or more other tax-exempt organizations. The organizations receiving the distributions musty have certain ownership or control over the title-holding corporation. The exemption for such title-holding corporations is dependent upon the continuation of the exemptions of the organizations receiving the distributions.

Fraternal Organizations

Section 501(c)(8) allows an exemption for fraternal beneficiary societies that operate under the lodge system or for the exclusive benefit of the members of a fraternity that operates under the lodge system, and that provide for the payment of life, sick, accident, or other benefits to the members of such society, order, association or to their dependents. Section 501(c)(10) provides an exemption to domestic fraternal societies operating under the lodge system that do not provide for the payment of life, sick, accident, or other benefits, if the fraternal organization’s net earnings are exclusively devoted to religious, charitable, scientific, literary, educational, and fraternal purposes.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© The Virtual Attorney | Attorney Advertising

Written by:

The Virtual Attorney

The Virtual Attorney on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.