In PLR 201007071, the IRS revoked the tax-exempt status of a social club as described in Internal Revenue Code section 501(c)(7), because the social club did not keep adequate records to show that the club was operating for the exclusive benefit of its members and their guests, rather than for the general public. Under the Internal Revenue Code, a social club must limit the total amount of nonmember income to 15%, but the existing records for the social club at issue here showed a minimum of 20% of nonmember income.
Posted by Jenny Robertson, Associate Editor, Wealth Strategies Journal.
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