A large portion of American society is made up of non-profit organizations, which are created for a variety of reasons, such as charity, education, and political activism. The 501c4, a social welfare organization, is one sort of non-profit organization. A 501c4 is exempt from the requirement to reveal its contributors and is permitted to engage in political activity and lobbying. A 501c4 must, however, be registered with the Internal Revenue Service (IRS) in order to receive these advantages. This essay will examine the price associated with submitting a 501c4 and other pertinent issues.
The cost of submitting a 501c4 varies according on the application process. There is a $50 filing charge if you use the IRS Form 8976 to submit your tax return electronically. However, there is a $600 cost if you submit a paper application using Form 1024. The IRS suggests using electronic filing since it is quicker, more practical, and more affordable.
501c4 organizations are eligible to receive contributions from both private citizens and businesses. Donations to 501c4 organizations, however, are not tax deductible for the givers. Thus, a lot of 501(c)(4) organizations rely on political action committees (PACs) to raise money. Money can be donated by PACs to 501c4s without having to disclose the donation. This enables 501c4s to receive significant donations without disclosing the donors’ names.
501c4 organizations enjoy a number of benefits over other non-profit entities. First, they are allowed to take part in political activities like lobbying and supporting candidates. This enables 501c4s to promote laws that support their goal and core principles. Second, because 501c4s are exempt from the requirement to disclose their contributors, they are able to accept sizable donations without disclosing the donors’ names. Thirdly, 501c4s can participate in greater commercial operations because they are free from the same tax-exempt standards as other non-profits.
Application for tax-exempt status is made using Form 1024 under a number of sections of the Internal Revenue Code, including Section 501c4. For organizations with annual gross receipts of $10,000 or more, the cost of submitting Form 1024 is $600. Organizations with a gross revenue of under $10,000 are subject to a $275 reduction. When submitting the application, the cost is due.
There isn’t a Form 1024 EZ, either. However, small organizations can submit Form 1023-EZ, a streamlined application form for section 501c3 tax-exempt status, provided their gross receipts for the current tax year and the two preceding years were less than $50,000. Compared to Form 1024, Form 1023-EZ is less expensive and simpler to complete.
In conclusion, registering for a 501c4 might be a difficult procedure, but it can be made easier by using Form 8976 to file electronically. Organizations can raise funds through donations and political action committees, and the cost of filing varies depending on the application form utilized. 501c4 organizations can participate in political activities and don’t have to reveal their contributors, among other benefits. There is no 1024 EZ form and the cost to file Form 1024 is $600, however small businesses can file Form 1023-EZ.
Yes, a Schedule B must be submitted along with the annual Form 990 tax return for a 501(c)(4) organization. The organization is required to report all donations made during the year on Schedule B, together with the names and addresses of contributors who gave more than $5,000. The IRS keeps this information confidential and does not make it available to the general public.