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ExpressTaxExempt Blog

Wednesday, May 11, 2016

Form 990 for Social Welfare Organizations

Do social welfare organizations need to e-file IRS Form 990?

Yes! And we’re here to cover the bases.

What Is a Social Welfare Organization?


In order to be considered a social welfare organization classified as tax exempt under Internal Revenue Code (IRC) section 501(c)(4), an organization must not be organized for profit and must be operated exclusively to promote social welfare.

What Is the Purpose of a Social Welfare Organization?


Well, basically they need to operate primarily to further the common good and general welfare of the people of the community. This is usually by bringing about civic betterment and social improvements.

What Is the IRC Section 501(c)(4)?


The Internal Revenue Code section 501(c)(4) provides for the exemption of two very different types of organizations with their own distinct qualification requirements. They need to be social welfare organizations or local associations of employees.

What Differs Between Community and Private Benefit?


Basically, the earnings of a section 501(c)(4) organization may not benefit any private shareholder or individual. If the organization earns excess profits with a person having substantial influence over the organization, an excise tax might be imposed on the person or organization.

There is one exception, though. If an organization is seeking legislation germane to their program, it is a permissible means of attaining more income for social welfare purposes.

This allows a section 501(c)(4) social welfare organization to further its exempt purposes through lobbying without jeopardizing its exempt status.

If you have any questions about your social welfare organization and e-filing Form 990, reach out to our customer service experts by phone at 704.839.2321 or by email at Support@ExpressTaxExempt.com.


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