The ISAO Special Publications 1000: Forming a Tax Exempt Entity document serves as a high-level overview of tax-exempt legal entity formation options under the Internal Revenue Code (the “Code”) for Information Sharing and Analysis Organizations (ISAOs). This document does not provide an overview of other federal taxes, non-tax considerations or state law considerations in choosing an entity type for an ISAO.

By carefully structuring an entity under the Code, ISAO creators and managers can avoid adverse tax consequences and thereby more effectively achieve their information-sharing goals to elevate the security of the nation and those entities participating in ISAOs. This document compares and contrasts the two primary tax-exempt entity types under the Code for ISAOs: (i) business leagues and (ii) charitable organizations. It is very important that ISAO creators and managers consult with legal counsel before organizing an entity described in this document, as there are many nuances and factual circumstances that may warrant special consideration and attention.