By Cathi Vannice and Virginia Latta Curulla

We received a determination letter from the Internal Revenue Service regarding our application for 501(c) 3 status for income tax purposes. The IRS has determined that we do NOT meet the requirements for this designation, but rather are a 501(c)7 organization. Our organization will be exempt from paying income tax on our income, but our individual members may NOT claim their donations as charitable contributions on their own income tax forms. We are allowed to apply for a bulk mail permit, but not at the lowest rate.

The editor will make the determination as to whether a bulk mail permit will be advantageous for Newsletter distribution.

According to the IRS, the following are attributes of a 501(c)7:

1) organizational requirements are less stringent,

2) there is no requirement to dedicate assets,

3) social activity must be primary and other activities less than primary,

4) there is no limit on legislative activity as long as it furthers the exempt purpose,

5) political activity is permitted but taxed,

6) the organization serves the social and recreational purposes of its members,

7) donations are not deductible as charitable contributions,

8) not eligible for lowest bulk mail rates,

9) generating enough public support to avoid classification as a private foundation is not an issue,

10) exempt from Federal income tax on income derived from members, but other sources are taxed.


If you have any comments or suggestions on the LGS meeting, or our tax status, please contact Ken Mueller, President at DocHuer@aol.com