Share
Explore BrainMass

Explanations of differences in Section 501(c) organizations

1. A volunteer fire company is most likely organized under Section:

a. 501(c)(1)
b. 501(c)(3)
c. 501(c)(4)
d. 501(c)(7)

2. A club formed for pleasure, recreation, and social activities is most likely
organized under Section:

a. 501(c)(1)
b. 501(c)(3)
c. 501(c)(4)
d. 501(c)(7)

3. An organization that promotes its members' common business interests is
most likely organized under Section:

a. 501(c)(2)
b. 501(c)(5)
c. 501(c)(6)
d. 501(c)(9)

Solution Preview

1.C. Most volunteer fire companies are C4s, but a few are C3s.

IRC 501(c)(4) provides for exemption of:
__Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare.
__Local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.

The statutory terms disclose that IRC 501(c)(4) embraces two general classifications:
a. Social welfare organizations, and
b. Local associations of employees.
http://www.irs.gov/pub/irs-tege/eotopici03.pdf

2.D.
501(c)(7) -Social and Recreation Clubs
If your club is organized ...

Solution Summary

The cited solutions carefully discuss the differences in the various 501(c) organizations.

$2.19