Nonprofit Law/just wondering

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Question
Can a non for profit organization such as the elks or American legion charge to get into there club to drink

Answer
It appears that you are asking whether a nonprofit organization may allow members of the public to pay an admission fee to enter their premises.  The answer depends upon what subsection of IRC 501(c) under which the organization was incorporated. You can find that in the articles of incorporation.  See IRS Publication 557 "Tax Exempt Status for Your Organization"
www.irs.gov/pub/irs-pdf/p557.pdf
starting on page 65 as to the different types of 501(c) organizations. The designation of the organization would also be on the IRS exemption determination letter.

But generally it appears that you are referring to either of two types of organizations. The IRS writes about the 501(c)(7) recreational or social organizations at
http://www.irs.gov/irm/part7/irm_07-025-007.html
Not that such an organization may be granted and be able to maintain exempt status easily only if it does not receive more than 35% of its gross receipts from outside its membership and receives no more than 15% of its gross receipts from nonmember use of club facilities. http://www.irs.gov/irm/part7/irm_07-025-007.html#d0e461

The other type of organization is called a Veterans Organization
http://www.irs.gov/irm/part7/irm_07-025-019.html
and there we see:
--- Start of Excerpt ---
Substantial unrelated activities may prohibit exemption. The following are examples of unrelated activities that may affect exemption:

Rents out its facilities to the general public;

Facilities, such as bar and dining facilities, open to the general public;
---End of Excerpt---
http://pages.citebite.com/b1a8p6d6w2gvm

Of course, those organizations would also need to consider their state alcoholic beverage control laws.

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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