Information For...

For you and your family
Standard mileage and other information

Forms and Instructions

Individual Tax Return
Instructions for Form 1040
Request for Taxpayer Identification Number (TIN) and Certification
Request for Transcript of Tax Return

 

Employee's Withholding Allowance Certificate
Employer's Quarterly Federal Tax Return
Employers engaged in a trade or business who pay compensation
Installment Agreement Request

Popular For Tax Pros

Amend/Fix Return
Apply for Power of Attorney
Apply for an ITIN
Rules Governing Practice before IRS

Inurement and Benefits to Members - Business Leagues (Trade Associations)

An organization does not qualify for exemption under Code section 501(c)(6) if any of its net earnings inures to the benefit of any member.  Members may nevertheless receive some kinds of benefits from the organization, such as newsletters and similar material.  In addition, return of dues or contributions members paid to support the organization, in proportion to amounts paid, is not inurement.  Moreover, the profitability of the members' individual enterprises may be enhanced by the successful promotion of the common business interest.

The statutory inurement proscription, however, precludes furnishing benefits for some members at special rates, at the expense of other members.  Other examples of inurement include:

  • Providing financial assistance and welfare benefits for members
  • Paying members for expenses incurred in defending, and judgments rendered in, malpractice suits
  • Owning a copyright on a product sold, and distributing the royalties to, members
  • Distribution of non-member income to members in the form of rebates or reduced dues
  • Rebates to members of amounts paid by both members and nonmembers for space rental at a trade show.


Return to Life Cycle of a Business League (Trade Association)