Section 501(c)(6) of the Internal Revenue Code provides a federal tax exemption for business leagues, chambers of commerce and other professional leagues that are not organized for profit. In order to fall under this exemption, your organization's mission must be to promote the common interest of the organization, and not benefit any particular member. If this describes your organization, there are a number of steps that must be completed to acquire 501(c)(6) status.
Draft Articles of Incorporation for the organization. Include the purpose of your organization, and specify how the assets of the organization will be distributed if the organization dissolves. In order to comply with Internal Revenue Service regulations, state that the assets will be distributed to another 501(c)(6) organization if your organization closes.
Read More: What Are the Requirements of a 501C3?
File the Articles of Incorporation in the state where your organization is located. Visit the website for the Secretary of State and you will likely find the appropriate forms, filing fees and directions for filing. Articles of Incorporation may also be known as a "certificate of incorporation," "charter document" or "articles of organization." Keep a copy of the articles for your records.
Download Form 1024 for recognition of exemption from the IRS website. Click on "Charities & Non-Profits," then "Other Non-Profits." From there, click on "Application for Recognition of Exemption," and then "Form 1024." Also download the instructions for the application from the same page.
Prepare Form 1024. Select "501(c)(6)" on the first page, and then follow the IRS instructions that you downloaded. Provide as much information as possible about your organization's activities, board members and budget. Be as detailed and clear as possible. Check the "Procedural Checklist" to ensure that you have complied with all filing requirements and have included the appropriate attachments.
Submit the application to the IRS. Download Form 8718, User Fee for Exempt Organization Determination Letter Request, to determine the fee and where to file the documents. On the IRS website, type "Form 8718" in the search box and click on the first result. Download the form, and mail Form 1024 to the address listed, along with the required fee.
File Form 990 on an annual basis with the IRS. Failure to do so may result in fees or loss of exemption. Include financial information and updates to your organization's activities on the form. Further, check with your state treasurer to find out if there are any filings or taxes that must be made within your state.
Elizabeth Rayne earned her J.D. from Penn State University and has been practicing law since 2009, advising clients on issues ranging from employment law to nonprofit management. For two years, she served as a contributing editor for the "Vermont Environmental Monitor."