Labor and agricultural unions can form and operate as 501(c)(5) organizations to qualify for nonprofit exemption status. Although 501(c)(5) organizations have a duty to provide service to their members first, they can make unlimited corporate, individual, or union contributions. 501(c)(5) organizations can also perform some political activities and attempt to influence legislation that is related to the common union interests of its members.
501(c)(5) organizations that expressly advocate for the election or defeat of a particular political candidate and spend more than $250 during a calendar year are required to disclose the name of each person who contributed more than $200 during the calendar year to the Federal Election Commission.
Benefits of Forming & Operating Under 501(c)(5)
501(c)(5) organizations can receive unlimited contributions from corporations, individuals, and labor unions. The names and addresses of contributors also don’t have to be disclosed for public inspection. However, all other information, including the number of contributions, the description of noncash contributions, and any other information must be made available for public inspection unless it identifies the contributor.
Union membership dues paid to a 501(c)(5) organization are generally considered an ordinary and necessary business expense and are tax-deductible unless a substantial part of the 501(c)(5) organization's activities consists of political activity, in which case a tax deduction is allowed only for the portion of membership dues that are for other activities.
“The lawyers at Barton Mendez Soto were very helpful in guiding the Classified Staff Association at MCCCD in establishing a non-profit corporation with the mission of representing employees.”- Shannon Ridgeway-Monaco, Former CSA Officer
“Mr. Barton took care of my discrimination case, very grateful for this team of people during such a stressful time.”- Previous Client
Our attorneys at Barton Mendez Soto have assisted in negotiating collective bargaining agreements and the formation of labor organizations recognized under section 501(c)(5) of the Internal Revenue Code. We have successfully handled union recognition efforts across Arizona and possess extensive experience with representation proceedings before the National Labor Relations Board (NLRB).
Our esteemed legal professionals are committed to providing the highest quality legal service to each of our clients. Our firm proudly supports and represents labor unions and progressive movements in their political action, so let us use our gifts and talents to further your goals.
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