401(c)3, 401(c)4, 509(a) -- what are the differences?

[cwa...@cc.gettysburg.edu]

You have two different issues.

1. Tax exempt organizations are generally enumerated in Section 501.
2. Charitable organizations are defined in Section 170.

The largest group of charitable organizations are 170(c)(3) and 501(c)(3)
organizations.

The difference between 501(c)(3) and the other 501's is dononations to a
(c)(3) are charitable deductions to the donor and most others are not.
The other 501(c)'s don't pay income taxes, but contributors get no deduction.

501(c)(3)
"Corporations, and any community chest fund, or foundation, organized and
operated exclusively for religious, charitable, scientific, testing for
public safety, literary or educational purposes, or to foster national or
international amateur sports competition(but only if no part of its
activities involve the provision of athletic facilities or equipment), or
for the prevention of cruelty to children or animals, no part of the net
earnings of which inures to the benefit of any private shareholder or
individual, no substantial part of the activities of which is carry on
propraganda, or otherwise attempting, to legislation,(except as otherwise
provided in subsection(h)), which does not participate in or intervene
in(including publishing or distributing of statements), any political
campaign on behalf of(or in opposition to) any candidate for public office."

Most organizations that cannot meet the "exclusively" test of 501(c)(3) are
tax exempt but not charitable.

Trusts operate under similiar guidelines. There are legislated exceptions,
child care centers etc,. Look in the Regulation 1.501 for a detailed
listings.
Charles Walton
Associate Professor
cwa...@gettsyburg.edu
(717) 337-6988

[Rich Thomson]

I know that all of these are sections of the IRS code detailing
various forms of non-profit or charitable organizations. Can anyone
quickly explain the differences between them? Thanks.

-- Rich
--
Life may not be perfect, but it can be optimized.
Internet: tho...@asylum.cs.utah.edu Rich Thomson
IRC: _Rich_ PEXt Programmer

[Ed.Shil...@worldlink.worldlink.com]

First, 401 deals with qualified plans, while 509(a) divides charitable
orgainzations into private foundations and public charities.

Second, 401(c) is the basis for so-called Keogh Plans, namely qualified plans
for the self-employed. 401(c)(4) deems self-employed persons (partners and
sole proprietors) to be "employees." 401(c)(3) imposed more stringent
requirements on Keogh Plans which covered "owner-employees." The concept has
limited utility today.

Ed Shillingburg 5/25/93

[Rich Thomson]

In article <930525140...@worldlink.worldlink.com>

Ed.Shil...@worldlink.worldlink.com, writes:
>First, 401 deals with qualified plans,

What's a qualified plan?

>Second, 401(c) is the basis for so-called Keogh Plans, namely qualified plans
>for the self-employed.

I suppose this would make sense to me if I knew what a QP was?