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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 Tax Issues for Tax-Exempt Social Clubs.  
  • 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.

Additional information:

Page Last Reviewed or Updated: 29-Jul-2016