What type of organization has no ownership and does not pay US federal taxes?

Non-profit organizations operate under a structure that is distinct from for-profit entities, primarily in their mission and financial operations. They are dedicated to furthering a social cause or advocating for a shared point of interest, rather than generating profit for owners or shareholders. Because of this focus on service rather than profit, non-profits are granted certain tax-exempt statuses under the Internal Revenue Code, allowing them to avoid federal taxes as long as they adhere to specific guidelines and regulations that govern charitable activities.

This tax-exempt status is a significant benefit that allows non-profits to allocate more resources toward their mission rather than toward tax obligations. They typically rely on donations, grants, and fundraising efforts to cover their operating costs, further reinforcing their purpose-driven nature.

In contrast, LLCs, corporations, and sole proprietorships are profit-oriented business structures that engage in commercial activities and, as such, are generally subject to federal taxes on their earnings. This fundamental difference in purpose and tax treatment highlights why the organization type described in the question is correctly identified as a non-profit.