Tipsheet: 501(c)(7) Social Clubs
Exemption Application Annual filing Basic Rules Examples Links
- Form 1024, including Schedule D (current form is dated 9/98)
- $400 for organizations with gross receipts normally $10,000 or less; $850 for larger organizations (Small automatically-revoked organizations seeking reinstatement may be eligible for a reduced fee of $100 under Transitional Relief rules until 12/31/2012)
- Submit fee using Form 8718
- There is no filing deadline for a 501(c)(7) application.
- Gross receipts normally less than $50,000 - file Form 990-N
- Gross receipts normally less than $200,000 - file Form 990-EZ
- Gross receipts normally more than $200,000 - file Form 990
- Check instructions: an organization's assets can also affect which form must be filed
- Caution: An organization that fails to file a required return for three years in a row will have its exempt status automatically revoked.
- 501(c)(7) social clubs must be organized for pleasure, recreation, and similar nonprofitable purposes
- Generally, social clubs are membership organizations primarily supported by dues, fees, charges or other funds paid by their members.
- Unlike most other types of exempt organizations, social clubs are taxed on all income derived from outside their membership, including investment income
- Advertisements inviting the public to patronize a 501(c)(7)'s facilities are considered evidence of a business (rather than non-profit) purpose.
- 501(c)(7) organizations may not have any written policy which discriminates against any person because of race, color or religion
- Donations are not deductible as charitable contributions
- Larger organizations may be required to disclose that contributions are not deductible in their solicitation materials
- (c)(7)'s cannot qualify for the special low rate non-profit bulk mailing permit
- Lobbying or political activity cannot be the primary purpose of a 501(c)(7) organization
- 501(c)(7)s are permitted to limit their membership based on membership in a political party
- Political expenditures will, in most cases, incur a penalty tax.
- Bowling leagues
- Hobby clubs
- Travel clubs
- Sports clubs
- Country clubs
- Dinner clubs
- Social Clubs IRS webpage summarizing rules for 501(c)(7) organizations
- IRS Publication 557, Tax Exempt Status for Your Organization
- There are many Exempt Organizations Continuing Professional Education articles on social clubs. The best way to access these is through the Exempt Organizations CPE Topical Index.
- Compliance Guide for Tax-Exempt Organizations (Other than 501(c)(3) Public Charities and Private Foundations)
- Section 7.25.7 of the Internal Revenue Manual