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A Bit on 501(c)(3) and VPC’s FFL

There seems to be a meme going around the VPC is somehow violating its status as a 501(c)(3) organization.  I would encourage everyone to examine the IRS requirements in this regard:

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.

What are exempt purposes?

The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.  The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.

VPC is in no way jeopardizing it’s tax exempt status by merely holding a Federal Firearms License.  If VPC were selling firearms at retail, which one can be pretty sure they are not, then they would be engaging in a non-exempt activity which would draw their tax status into question.  If they hold a federal firearms license for purposes related to one of the exempted activities, then that is just fine by the IRS.

6 Responses to “A Bit on 501(c)(3) and VPC’s FFL”

  1. jetfxr69 says:

    So in what way is VPC not an “action organization”?

  2. Sebastian says:

    Political activity has a pretty specific definition in the tax code. It doesn’t mean you can’t advocate for gun control. Technically that’s not political activity. Political activity is promoting specific legislation, or a specific candidate. That’s a good bit more simplified than it really is, but that’s the gist of it. VPC is an educational organization, not a political action group, under IRS rules.

    NRA proper is a 501(c)(4), which is permitted to do political activity. The NRA Foundation is 501(c)(3), and only does educational stuff. But educational stuff is a pretty broad topic. Informing membership, for instance, about the nature of various gun control groups, or types of gun control being called for, or educating members on why it’s important to oppose bans on assault weapons, is all considered educational. Asking members to support/oppose a specific bill, or candidate, is considered action oriented, and can’t be done by a (c)(3).

    Second Amendment Foundation is a 501(c)(3) as well.

  3. Sebastian says:

    I should also note that NRA-PVF is organized as a PAC, created primarily to influence the nomination, election, appointment or defeat of candidates for public office. It’s regulated by the Federal Election Commission. If you want to donate money directly to candidate, you have to form a PAC.

  4. It’s probably not a problem for the IRS. It probably IS for the BATF.

  5. countertop says:

    I don’t know about that other sebastian. I can imagine a situation where you possess an FFL and actively utilize it for educational purposes and not for simply over the counter for profit sales purposes.

  6. Rob K says:

    If you were engaged in firearms training, and thus needed to buy new firearms and dispose of your used firearms, an FFL would be useful, even though selling guns at retail isn’t your primary business. Someplace like a boy scout camp that teaches riflery with .22s, for instance.

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