Nonprofit Law/501(c)(7)

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Question
I recently took over a Flyball club (Dog Sport) which is trying to register as a 501(c)(7) charitable organization. I understand that this should have been done prior to conducting activities, but that time is gone, as are the club officers in charge up to last October.

Today I was provided with a letter from the State of Oregon Attorney Generals office requiring registration as a non-profit charitable corporation. Response was required by 12-20-14.

Am I correct in believing that the registration as a public benefit corporation was in error, and as a charitable association under 501(c)(7) registration is not required? Or, is a 501(c)(7) still required to register and provide Articles of Incorporation to the ODOJ?

Answer
It appears you are referring to a social club and social clubs do not qualify for "charitable" organization status.  IRC 501(c)(7) exempts from federal income tax, clubs "organized for pleasure, recreation, and other nonprofitable purposes, substantially all of the activities of which are for such purposes and no part of the net earnings of which inures to the benefit of any private shareholder."
http://www.irs.gov/irm/part7/irm_07-025-007.html

A social club is for private benefit and, therefore, you did make an error by incorporating as a public benefit corporation. When you correct that error your organization will not be subject to the State's registration requirement for charities with the Attorney General's Office.

I have in my profile in my forum at http://bit.ly/NonprofitLaw the free service that I offer is only for questions directly related to IRS exempt purpose issues of 501(c)(3) organizations.

From what you wrote, I suggest that you consider hiring me for at least a one hour consultation. If you want to hire me, send me an email directly to my email address below and I will quote you my fees.

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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