Tax-Exempt Status and Compliance

Home Tax-Exempt Status and Compliance

Hartung Schroeder has extensive experience founding and working with non-profit organizations in Iowa, across the United States, and around the world.

As defined by Internal Revenue Code 501(c), a nonprofit (also referred to as a non-governmental organization, or NGO) is a public charity that operates for public benefit of a community, and are thus tax-exempt due to their contribution to society. Nonprofits are extremely diverse, their goals and missions encompassing humanitarian, environmental and animal rights issues and causes.

To mirror the diversity of nonprofits, there are 29 different types of organizations recognized under the IRS tax code 501(c). Each with their own rules and regulations to follow. They range from credit unions (c)(14), cemetery companies (c)(13), teacher’s retirement fund associations (c)(11), co-ops (c)(16) and mutual insurance companies (c)(15).

Tax group 501(c)(3) is the most abundant of the 29 distinct types of nonprofits that are recognized by tax law. Uniquely, they are one of the few types of nonprofits where a donation is tax deductible. Roughly 35% of these nonprofits are focused on human services, such as feeding the homeless, caring for the elderly and helping battered women. Education groups account for the next largest group at 17%, then health services at 13%, Civil Rights at 11%, religious organizations at 6%, environment and animal rights groups at 5% and international development at 2%.

At Hartung Schroeder, we routinely assist clients with the following:

  • Application, qualification and ongoing compliance with tax-exempt status under 501(c)(3), 501(c)(4), 501(c)(6) and other exemption categories
  • Public charity classification, reclassification and reinstatement
  • Public support test computation and evaluation under 509(a)(1) and 509(a)(2)
  • Regulation of private foundations and alternatives, such donor-advised funds and supporting organizations/li>
  • Termination of private foundation status/li>
  • IRS audits and compliance programs (including executive compensation)
  • Regulation of charities and foundations under the Pension Protection Act of 2006
  • Unrelated business income tax (UBIT)
  • Private inurement and private benefit analysis
  • Related-party transactions and the self-dealing and excess benefit transaction (or intermediate sanctions) rules
  • Public policy development, advocacy, lobbying and political activities

Attorney Updates

Public Case Updates

Ready to talk? Our team is standing by.