-By Dina Rasor
July 5, 2012- We interact with nonprofit organizations every day – little league, Girl Scouts, churches, League of Woman Voters, the PTA, the Rotary Club, volunteer firefighter organizations and veterans' service organizations. The US tax law set up two main types of nonprofit organizations to help the general society. The IRS describes them this way:
501(c)3 non profit organization – Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations.
501(c)4 non profit organization – Civic Leagues, Social Welfare Organizations and Local Associations of Employees
C3 organizations do not have to pay tax on their income, and donors can take a charitable tax deduction. C3 organizations are not allowed to be involved in political campaigns, but can do limited lobbying for legislation that involves their mission.