IRS Rules for 501(c)(3)

Written by True Tamplin, BSc, CEPF® | Reviewed by Editorial Team

Updated on December 14, 2022

501(c)(3) IRS Rules Made Easy

The IRS has a laundry list of rules for the operation of 501(c)(3)s, but some of the most important are:

  • Must be run as a nonprofit
  • At least one third of income must come from public donations (for public charities)
  • Must not engage in lobbying or political activity

IRS Rules for 501(c)(3) FAQs

What is a 501(c)(3) organization?

A 501(c)(3) organization is a non-profit organization with tax exempt status that is dedicated to the general well-being of society.

What Are IRS Rules for 501(c)(3)?

The biggest requirement for maintaining 501(c)(3) status is to always be run and perate as a nonprofit and to not engage in political lobying or activity.

Is a 501(c)(3) organization tax exempt?

A 501(c)(3) organization is tax exempt so long as it remains true to its stated mission and remains compliant with the IRS.

What does 501(c)(3) mean?

501(c)(3) is the internal revenue code (IRC) section for organizations with tax exempt status. 501(c)(3) falls under internal revenue code 501(c).

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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