*501 (c) (4) tax-exempt status
501 (c)(4) tax status permits tax exemptions for the alumni club, and is the tax status designation that we require all new alumni groups to apply for. These exemptions may not include exemption from your state’s sales tax. 501 (c)(4) is the preferred status by the university to keep fundraising centralized inside the university. Being a 501 (c)(4) requires a simple informational reporting to the IRS once a year. Alumni groups should not apply for 501(c)(3) tax-exempt status.
- What is tax exempt? The IRS basically defines a tax exempt entity as non-profit (IRS Publication 557).
- As a 501 (c)(4) what are we exempt from? Paying taxes on earned income such as interest dividends.