Life cycle of a social welfare organization

Civic leagues and social welfare organizations are exempt under section 501(c)(4) of the Internal Revenue Code. Social welfare organizations generally fall into one of the following categories:

• Organizations that may be performing some type of public or community benefit but whose principal feature is lack of private benefit or profit;
• Organizations that would qualify for exemption under section 501(c)(3) but for a defect in their organizing documents or if they were not "action organizations"; and
• Nonprofit organizations that traditionally have been labeled in common parlance as social welfare organizations.

During its existence, a social welfare organization has numerous interactions with the IRS from filing an application for recognition of tax-exempt status, to filing the required annual information returns, to making changes in its mission and purpose. New legislation enacted at the end of 2015 added Section 506 to the Internal Revenue Code that requires an organization to notify the IRS of its intent to operate as a Section 501(c)(4) organization. Organizations should use Form 8976 to provide this notification. This requirement only applies to organizations intending to operate under Section 501(c)(4).

The IRS provides information, explanations, guides, forms and publications on all of these subjects through this IRS Web site. The illustration below provides an easy-to-use way of linking to the documents most organizations will need as they proceed though the phases of their "life cycle."

Starting out

• Notification Requirement
  • Form 8976, Notice of Intent to Operate Under Section 501(c)(4)
• Creating the Organization
  • Organizing Documents
  • Bylaws
• Employer Identification Number
  • Application Form PDF
  • Online EIN Application
• Types of 501(c)(4) Organizations
  • Social Welfare Organizations
    • Examples of social welfare organizations
  • Local Associations of Employees
• Social Welfare Defined

Applying to the IRS