All rights reserved. It is important to remember that the applications for tax-exempt status are open for public inspection and must be retained for this purpose permanently. Essential IRS Classifications Of the many types of tax-exempt organization, six are of particular importance to the reader of this article. They are listed below by type, advantage and disadvantages. Advantages Contributions are deductible by the donor.
Postal rates are favorable.
State sales tax and other local tax exemptions are possible if allowable under state law. Exemption from FICA tax election is available to clergy. Disadvantages Insubstantial amounts can be spent on lobbying to influence legislation. There is absolute prohibition from lobbying in election campaigns. Earnings cannot inure to individuals.