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Internal Revenue Code section 501(c)(7) prohibits exemption if any part of the organization¡¯s net earnings inures to the benefit of any person having a personal and private interest in the organization¡¯s activities. Inurement is not limited to overt distributions; even undistributed earnings may benefit members by decreasing membership dues or increasing the services the club makes available to its members without a corresponding increase in dues or other fees paid for club support. Fixed fee payments to members who bring new members into the club are not an inurement of the club¡¯s net earnings, if the payments are reasonable compensation for performing necessary administrative service. Also, a club may pay cash prizes to winners of a club bowling tournament without violating this prohibition.