This would be a way for an incorporated club to become a non-profit with less overhead and expense related to 501(c)(3), In a social club, any donations are NOT tax deductible. This supposedly also a club to be incorporated for legal protection, etc. but avoid taxes for dues from members, etc.
Does anyone have experience with setting up a stamp club as a non-profit under the IRS code 501(c)(7) Social Club? This is different code from what APS and other associations that are set up as a non-profit. In a social club, donations are not tax deductible.
Social clubs may be exempt from federal income taxation if they meet the requirements of section 501(c)(7) of the Internal Revenue Code. Although they are generally exempt from tax, social clubs are subject to tax on their unrelated business income (see below), which includes income from nonmembersPDF. In addition to being taxed on unrelated income, a social club may lose its exempt status if it receives too much unrelated income. See "Effect of Nonmember Income" below.https://www.irs.gov/charities-non-p...social-clubs