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Question
We are a small volunteer fire department (VFD) that serves a small rural community and the county under contract to the county emergency service district and have a 501 C4 IRS designation. Review of your answers has brought to our attention that we need to make sure that our dealings with outside non tax exempt do not but our tax exempt status in jeopardy.
We have one situation that we are not sure of after review of your previous answers.  The rural community is managed by a property owners association (POA). The POA is not tax exempt.  The VFD and POA have their annual meeting on the same day.  The POA normally uses the VFD building for their meeting given its larger size compared to the POA community center at no fee.  Is this any problem with the IRS for our 501 C4 status?

Answer
There are two main types of 501(c)(4) organizations and it appears that your group obtained the designation because yours is a social welfare organization.
http://goo.gl/R8FJaU

In any case, a 501(c)(4) organization must not give private benefits. http://goo.gl/DFKh9 but for it to be an issue with the IRS, the private benefit would need to be substantial in relations to your total budget and one meeting room per year may not be substantial. An extensive discussion by the IRS of the private benefit issue relating to 501(c)(3) organizations is found at:
http://www.irs.gov/pub/irs-tege/eotopich01.pdf

Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com

Nonprofit Law

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Harvey Mechanic

Expertise

I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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