Publication 557 |
2001 Tax Year |
Introduction
An organization may qualify for exemption from federal income tax
if it is organized and operated exclusively for one or more of the
following purposes.
- Charitable.
- Religious.
- Educational.
- Scientific.
- Literary.
- Testing for public safety.
- Fostering national or international amateur sports
competition (but only if none of its activities involve providing
athletic facilities or equipment; however, see Amateur Athletic
Organizations, later in this chapter).
- The prevention of cruelty to children or animals.
To qualify, the organization must be a corporation, community
chest, fund, or foundation. A trust is a fund or foundation and will
qualify. However, an individual or a partnership will not qualify.
Examples.
Qualifying organizations include:
- Nonprofit old-age homes,
- Parent-teacher associations,
- Charitable hospitals or other charitable
organizations,
- Alumni associations,
- Schools,
- Chapters of the Red Cross or Salvation Army,
- Boys' or Girls' clubs, and
- Churches.
Child care organizations.
The term educational purposes includes providing for
care of children away from their homes if substantially all the care
provided is to enable individuals (the parents) to be gainfully
employed and the services are available to the general public.
Instrumentalities.
A state or municipal instrumentality may qualify under section
501(c)(3) if it is organized as a separate entity from the
governmental unit that created it and if it otherwise meets the
organizational and operational tests of section 501(c)(3). Examples of
a qualifying instrumentality might include state schools,
universities, or hospitals. However, if an organization is an integral
part of the local government or possesses governmental powers, it does
not qualify for exemption. A state or municipality itself does not
qualify for exemption.
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