How Unrelated Business Income Can Jeopardize Tax-Exempt Status
05/01/2018 - (This article first appeared in the May-June 2018 issue of The American Postal Worker magazine)
By Secretary-Treasurer Liz Powell
IRS 501(c)(5) status provides exemption from federal income tax to labor, agricultural or horticultural organizations. APWU affiliates are 501(c)(5) organizations and provided tax-exempt status. Tax-exempt status refers to federal income tax exemption under the Internal Revenue Code. APWU locals do not pay income tax on dues collected nor taxes on the interest earned on investments. However, they must pay sales tax for purchases and payroll taxes for employees.