1.501(c)(4)-1. Civic organizations and local
associations of employees
(a) Civic organizations
(1) In general. --A civic league or organization
may be exempt as an organization described in section 501(c)(4)
if:
(i) It is not organized or operated for profit;
and
(ii) It is operated exclusively for the promotion
of social welfare.
(2) Promotion of social welfare
(i) In general. --An organization is operated
exclusively for the promotion of social welfare if it is primarily
engaged in promoting in some way the common good and general
welfare of the people of the community. An organization embraced
within this section is one which is operated primarily for the
purpose of bringing about civic betterments and social improvements.
A "social welfare" organization will qualify for exemption
as a charitable organization if it falls within the definition
of "charitable" set forth in paragraph (d)(2) of §1.501(c)(3)-1
and is not an "action" organization as set forth in
paragraph (c)(3) of §1.501(c)(3)-1.
(ii) Political or social activities. --The promotion
of social welfare does not include direct or indirect participation
or intervention in political campaigns on behalf of or in opposition
to any candidate for public office. Nor is an organization operated
primarily for the promotion of social welfare if its primary
activity is operating a social club for the benefit, pleasure,
or recreation of its members, or is carrying on a business with
the general public in a manner similar to organizations which
are operated for profit. See, however, section 501(c)(6) and
§1.501(c)(6)-1, relating to business leagues and similar
organizations. A social welfare organization that is not, at
any time after October 4, 1976, exempt from taxation as an organization
described in section 501(c)(3) may qualify under section 501(c)(4)
even though it is an "action" organization described
in §1.501(c)(3)-1(c)(3)(ii) or (iv), if it otherwise qualifies
under this section. For rules relating to an organization that
is, after October 4, 1976, exempt from taxation as an organization
described in section 501(c)(3), see section 504 and §1.504-1.
(b) Local associations of employees. --Local
associations of employees described in section 501(c)(4) are
expressly entitled to exemption under section 501(a). As conditions
to exemption, it is required (1) that the membership of such
an association be limited to the employees of a designated person
or persons in a particular municipality, and (2) that the net
earnings of the association be devoted exclusively to charitable,
educational, or recreational purposes. The word "local"
is defined in paragraph (b) of §1.501(c)(12)-1. See paragraph
(d)(2) and (3) of §1.501(c)(3)-1 with reference to the
meaning of "charitable" and "educational"
as used in this section. [Reg. §1.501(c)(4)-1.]
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