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Nonprofit Law/501(c)7 vs. 501(c) 10

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Question
You mentioned that a 501c10 is different from a 501c7 in that its earnings are devoted to religious, charitable, scientific purposes in addition to fraternal purposes.  Is a 501(c)10 a public charity since its earnings are devoted to charitable purposes?



Previously posted Answer
A 501(c)(7) social or recreational organization is discussed at www.irs.gov/irm/part7/ch10s10.html

See http://pages.citebite.com/w7n3s8n8dbav for the statutory wording for the (c)(7) and down a little further for the (c)(10)

IRC 501(10) was added to the Code because some fraternals did not have an insurance feature. A fraternal society exempt under IRC 501(c)(10) is one that is described in IRC 501(c)(8) except that it does not provide benefits to members. Its earnings are devoted to religious, charitable, scientific, literary, educational, and fraternal purposes.

The (c)(8) is described at:
http://www.irs.gov/irm/part7/ch10s11.html

Answer
See IRS Publication 557 "Tax Exempt Status for Your Organization"
which is available at:
http://www.irs.gov/pub/irs-pdf/p557.pdf
and you will see that the IRS only uses the term "public charity" to refer to a particular type of 501(c)(3) organization.  For example, in the middle column of page 32:
--- Start of Excerpt ---
If your organization is newly applying for rec-
ognition of exemption as an organization de-
scribed in this chapter (a section 501(c)(3)
organization) and you wish to establish that your
organization is a public charity rather than a
private foundation, you must complete the appli-
cable lines of Part X of Form 1023
---End of Excerpt---

"Public charity" is not relevant to a c10 organization and the IRS would not refer to a c10 organization as a "public charity".  Even though you did not ask, you may want to note on page 72 right column as to whether donations are deductible as charitable contributions for federal income tax purposes for the c10 organizations -- "Yes, if for certain 501(c)(3) purposes".

Harvey Mechanic, Attorney at Law - Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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