Contributions Tax Deductible
NoVES Tax Exempt Status
Tax Status of the Northern Virginia Ethical Society (NoVES)
The Internal Revenue Code offers an exemption from federal income tax to organizations described in section 501(c)(3) of the Internal Revenue Code. Among the types of section 501(c)(3) organizations are those that are organized and operated exclusively for charitable, religious, scientific, and educational purposes. All section 501(c)(3) organization are further divided into those that are private foundations (obtain support from limited sources) and those that are public charities (obtain support from broad sources). One type of public charity is a church (other types of public charities are schools, hospitals, and charities that receive significant financial support from the general public).
Why A church?
Ethical Societies litigated this issue in both federal and state courts. Washington Ethical Society v. District of Columbia, 249 F.2d 127 (D.C.Cir. 1957) was a 1957 case of the United States Court of Appeals for the District of Columbia Circuit. The court held that “the Washington Ethical Society functions much like a church, but regards itself as a non-theistic religious institution, honoring the importance of ethical living without mandating a belief in a supernatural origin for ethics.” A similar result was reached in a 2003 court decision regarding the qualification of the Ethical Society in Austin, Texas, as a tax-exempt religious organization for state tax purposes. Appellate court decision in Carole Keeton Strayhorn, in her Official Capacity as Comptroller of Public Accounts v. Ethical Society of Austin, f/k/a Ethical Culture Fellowship of Austin, reported at 110 S.W.3d 458 (Texas App., Austin 2003).
Is NoVES recognized as a tax-exempt church by the IRS?
The Internal Revenue Service issued the American Ethical Union, Inc., a group exemption determination letter dated March 22, 2013. The AEU Group Exemption number is 5915. The group exemption determination letter recognizes five Ethical Societies as churches that are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, including NoVES. In addition, the letter assures donors that donations to these Ethical Societies qualify as tax-deductible contributions. Most of the other Ethical Societies have individual exemption determination letters. The AEU's group exemption permits it to add Ethical Societies without having to obtain IRS permission.
As a nonprofit religious and educational organization, NoVES is also exempt from Virginia income and sales taxes.
Can someone contact the IRS about NoVES' status?
Anyone may contact the IRS Customer Account Services unit at toll free number 1-877-829-5500 to verify the tax-exempt status of a particular Ethical Society. "I would like to check on the tax exempt status of the Northern Virginia Ethical Society. It is included within the group exemption issued to the American Ethical Union. The Northern Virginia Ethical Society's EIN is 54-1305690. It's address is P.O. Box 984, Vienna, Virginia 22183." Alternatively, an interested person may write to the IRS at the following address: IRS. TEGE Customer Account Services, P.O. Box 2508, Cincinnati, OH 45201.
Are there limitations on activities that apply to a section 501(c)(3) organization?
For starters, NoVES can not engage in any political activity. Political activity occurs when a tax-exempt organization participates or intervenes in any political campaign on behalf of, or in opposition to, any candidate for public office. The term “candidate for public office” is defined as an individual who offers himself, or is proposed by others, as a contestant for an elective public office, whether such office be national, State, or local.
NoVES can not engage in substantial amounts of legislative activity. Legislative activity means attempts to influence legislation. Attempting to influence legislation occurs when a tax-exempt organization contacts, or urges its members or the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation. Attempting to influence legislation also occurs when a tax-exempt organization advocates the adoption or rejection of legislation.
Substantial is not defined as that term is applied to the legislative activity proscription. It depends on all the facts and circumstances, including the amount of money spent (generally five percent or less is not substantial), the amount of time spent (by paid staff and volunteers), the type of outreach (limited to members versus attempt to engage the general public), duration of the activity, and consequences.
NoVES can not engage in activities that impermissibly benefit private persons, including its Leader, Board of Directors, members, or any other persons. NoVES is permitted to benefit private persons where the benefit is incidental (e.g. necessary and not excessive) to accomplishing its exempt purposes. For example, NoVES can offer courses and workshops to its members and/or the general public that advance religious and/or educational purposes without running afoul of the private benefit prohibition.