• James D. Lynch

WHAT IS A 501(c)(3)?

You may have heard someone say that their company is "a 501(c)(3)." But what does that mean?

501(c)(3) is a section of the Internal Revenue Code. It refers to a certain type of nonprofit company.

A nonprofit company (also called a not-for-profit company) is one that has been organized for a nonprofit purpose (such as a charitable purpose). A 501(c)(3) is a nonprofit company that has gone through the additional steps necessary to become recognized by the IRS as a charitable organization.

The biggest benefit of a 501(c)(3) is its tax-exempt status. A 501(c)(3) is exempt from various taxes such as federal tax, sales tax, and property taxes.

Another benefit is tax-deductible contributions. People who make charitable donations to a 501(c)(3) are able to take a tax deduction for the amount of the contribution.

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Law Office of James D. Lynch, PLLC

3000 Joe Dimaggio Blvd #90, Round Rock, TX 78665


(512) 745-6347

(714) 745-3875

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