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501(c) is a subsection under the
United States Internal Revenue

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Code, or IRC, that designates
certain types of organizations

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as tax-exempt.

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The term is also
used as shorthand

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to refer to nonprofit
organizations, like charities,

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government entities, and
advocacy organizations.

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An organization
with 501(c) status

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does not have to pay
federal income tax.

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Also, donations to
certain qualified

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tax-exempt organizations
may be tax-deductible.

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There are multiple
kinds of 501(c),

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including 501(c)(3) for
religious, charitable,

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scientific, literary, or
educational organizations,

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501(c)(4) for organizations
that promote social welfare,

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and 501(c)(6) for business
leagues or chambers of commerce

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that are not
organized for profit.

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501(c) also includes
fraternal societies

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that operate under
the lodge system

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and provide payment of life,
illness, and other benefits

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for members.

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Teacher's retirement
fund associations

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are tax-exempt so long as income
consists of amounts received

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from public
taxation, assessments

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based on the teaching
salaries of members,

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and income from investments.

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501(c) status does not
apply automatically

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to organizations that fit
in one of these categories.

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Groups must first
apply and meet all

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of the stipulations
required by the IRS

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before 501(c) status
can be acquired

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through federal authorization.

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