Below are the IRS Social club requirements.
Please visit www.irs.gov/Charities-&-Non-Profits/Other-Non-Profits/Social-Clubs
To be exempt, a social club must meet the following requirements—
- The club must be organized for exempt purposes .
- Substantially all of its activities must further exempt purposes
- If the club exceeds safe harbor guidelines for nonmember and investment income, the facts and circumstances must show that it is organized substantially for exempt purposes.
- The club has de minimis income from nontraditional sources (i.e., from investments or from activities that, if conducted with members, would further the club’s tax-exempt purposes).
- For a discussion of the effect of nonmember and “nontraditional” income on the tax-exempt status of social clubs under section 501(c)(7), see Nonmember Income.
- The club must provide an opportunity for personal contact among members, and membership must be limited.
- The club must be supported by membership fees, dues, and assessments.
- The organization’s net earnings may not inure to the benefit of any person having a personal and private interest in its activities.
- The club’s governing instrument may not contain a provision that provides for discrimination against any person on the basis of race, color, or religion.
- The club may not hold itself out as providing goods and services to the general public.
Examples of tax-exempt social & recreational clubs
Organizations that may be exempt under Internal Revenue Code section 501(c)(7), if they meet the requirements for exemption, include–
- College social/academic fraternities and sororities
- Country clubs
- Amateur hunting, fishing, tennis, swimming and other sport clubs
- Dinner clubs that provide a meeting place library, and dining room for members
- Variety clubs
- Hobby clubs
- Homeowners or community associations whose primary function is to own and maintain recreational areas and facilities
To be exempt, a social club must meet the following requirements—
- The club must be organized for exempt purposes .
- Substantially all of its activities must further exempt purposes
- If the club exceeds safe harbor guidelines for nonmember and investment income, the facts and circumstances must show that it is organized substantially for exempt purposes.
- The club has de minimis income from nontraditional sources (i.e., from investments or from activities that, if conducted with members, would further the club’s tax-exempt purposes).
- For a discussion of the effect of nonmember and “nontraditional” income on the tax-exempt status of social clubs under section 501(c)(7), see Nonmember Income.
- The club must provide an opportunity for personal contact among members, and membership must be limited.
- The club must be supported by membership fees, dues, and assessments.
- The organization’s net earnings may not inure to the benefit of any person having a personal and private interest in its activities.
- The club’s governing instrument may not contain a provision that provides for discrimination against any person on the basis of race, color, or religion.
- The club may not hold itself out as providing goods and services to the general public.