Social clubs may be exempt from federal income taxation if they meet the requirements of section 501(c)(7) of the Internal Revenue Code. Although they are generally exempt from tax, social clubs are subject to tax on their unrelated business income-- generally all income from non-members. In addition to being taxed on unrelated income, a social club may lose its exempt status if it receives too much unrelated income.
Additional information
- Publication 557, Tax-Exempt Status for Your Organization
- Publication 598, Tax on Unrelated Business Income of Exempt Organizations
- Publication 4221-NC, Compliance Guide for Tax-Exempt Organizations (other than charities) PDF
- Published guidance - exempt organizations
- Exempt organizations continuing professional education articles PDF