Why are private country clubs allowed "non profit" status....!

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Message 1283963 - Posted: 15 Sep 2012, 8:21:35 UTC

This was the first example article I found after I discovered this non-profit factoid.

I'm sure there are other examples.


But WTH? (I'm hoping this can be a good bipartisan discussion here for a change).

This isn't right, is it? again, WTH?


-Dave #2

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Message 1283979 - Posted: 15 Sep 2012, 9:11:11 UTC

This is a very complex issue in the UK. It's all down to something called "Mutual Trading", and is usually used to gain various tax exemptions. Political parties are allowed to be non profit organisations by HMRC as the funds generated are used for campaigning. In my view, and that of many others, private Golf Clubs should not be allowed to avoid taxes in this way.

Golf Clubs

General

Tax relief

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Message 1284118 - Posted: 15 Sep 2012, 16:09:57 UTC - in response to Message 1283963.  

This was the first example article I found after I discovered this non-profit factoid.

I'm sure there are other examples.


But WTH? (I'm hoping this can be a good bipartisan discussion here for a change).

This isn't right, is it? again, WTH?

Wait until you find out about 501(c)10 and 501(c)8!

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Message 1284491 - Posted: 16 Sep 2012, 15:55:30 UTC

Could it be because the members of Country clubs are also in large part the same people that write the laws?


Bob DeWoody

My motto: Never do today what you can put off until tomorrow as it may not be required. This no longer applies in light of current events.

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Message 1284498 - Posted: 16 Sep 2012, 16:19:54 UTC

Non profit organisations used to be only those that benefited or gave a service to the general public. Amnesty International, Oxfam, Rotary International, the Red Cross and Red Crescent organizations, UNESCO, World Wide Fund for Nature etc.
One can hardly call an upmarket private golf club one for the general public. Perhaps by legal definition they are NPO's but that is not within the spirit of the intention.

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Message 1284600 - Posted: 16 Sep 2012, 21:07:26 UTC - in response to Message 1284491.  

Could it be because the members of Country clubs are also in large part the same people that write the laws?

And we have a winner. Bingo
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Message 1284697 - Posted: 17 Sep 2012, 4:43:52 UTC

According to the IRS Publication 557, in the Organization Reference Chart section, the following is an exact list of 501(c) organization types and their corresponding descriptions.

501(c)(1) — Corporations Organized Under Act of Congress (including Federal Credit Unions)
501(c)(2) — Title Holding Corporation for Exempt Organization
501(c)(3) — Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations
501(c)(4) — Civic Leagues, Social Welfare Organizations, and Local Associations of Employees
501(c)(5) — Labor, Agricultural, and Horticultural Organizations
501(c)(6) — Business Leagues, Chambers of Commerce, Real Estate Boards, etc.
501(c)(7) — Social and Recreational Clubs
501(c)(8) — Fraternal Beneficiary Societies and Associations
501(c)(9) — Voluntary Employee Beneficiary Associations
501(c)(10) — Domestic Fraternal Societies and Associations
501(c)(11) — Teachers' Retirement Fund Associations
501(c)(12) — Benevolent Life Insurance Associations, Mutual Ditch or Irrigation Companies, Mutual or Cooperative Telephone Companies, etc.
501(c)(13) — Cemetery Companies
501(c)(14) — State-Chartered Credit Unions, Mutual Reserve Funds
501(c)(15) — Mutual Insurance Companies or Associations
501(c)(16) — Cooperative Organizations to Finance Crop Operations
501(c)(17) — Supplemental Unemployment Benefit Trusts
501(c)(18) — Employee Funded Pension Trust (created before June 25, 1959)
501(c)(19) — Post or Organization of Past or Present Members of the Armed Forces
501(c)(21) — Black lung Benefit Trusts
501(c)(22) — Withdrawal Liability Payment Fund
501(c)(23) — Veterans Organization (created before 1880)
501(c)(25) — Title Holding Corporations or Trusts with Multiple Parents
501(c)(26) — State-Sponsored Organization Providing Health Coverage for High-Risk Individuals
501(c)(27) — State-Sponsored Workers' Compensation Reinsurance Organization
501(c)(28) — National Railroad Retirement Investment Trust
501(c)(29) — Qualified Nonprofit Health Insurance Issuers (Created in section 1322(h)(1) of the Affordable Care Act)


So your local bridge club or your local model railroad club or your local computer users group or horror upon horror the local country club is a 501(c)(7)!

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Message 1284733 - Posted: 17 Sep 2012, 9:14:02 UTC

So your local bridge club or your local model railroad club or your local computer users group or horror upon horror the local country club is a 501(c)(7)!

Quite correct. But obviously as can be seen, this also applies to multi million dollar private golf clubs. They are not breaking the law, but they are simply using it to their advantage because they can. There is of course a very simple answer isn't there?

Amend the rules so that Tax reliefs are only allowed under category 501(c)(7) to those with a turnover of less than $1000 a year. But of course as been already alluded to, those that make the tax laws have no interest in doing that as most are probably members of these upmarket clubs.

It is right that this should be highlighted, but don't expect any changes soon!

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Message 1284787 - Posted: 17 Sep 2012, 13:56:42 UTC - in response to Message 1284733.  

So your local bridge club or your local model railroad club or your local computer users group or horror upon horror the local country club is a 501(c)(7)!

Quite correct. But obviously as can be seen, this also applies to multi million dollar private golf clubs. They are not breaking the law, but they are simply using it to their advantage because they can. There is of course a very simple answer isn't there?

Amend the rules so that Tax reliefs are only allowed under category 501(c)(7) to those with a turnover of less than $1000 a year. But of course as been already alluded to, those that make the tax laws have no interest in doing that as most are probably members of these upmarket clubs.

It is right that this should be highlighted, but don't expect any changes soon!


Ah another who knee jerks. The model railroad club often buys a building to put up their layout. That is far over $1000 a year.

I suspect a lot of you think that just because they are not for profit that the money they collect is tax deductible. It isn't. They aren't a charity. Any employee's pay income tax. They pay sales tax and real estate tax. There is no profit, no dividends. No profit, no income tax.

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Message 1284796 - Posted: 17 Sep 2012, 14:15:27 UTC

Im willing to bet that there are some on here who would say that our own GPU user group shouldnt be tax exempt.


[/quote]

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Message 1284801 - Posted: 17 Sep 2012, 14:28:34 UTC

Yes they should, and quite rightly too.

Anyone want to argue?????



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Message 1284805 - Posted: 17 Sep 2012, 14:37:19 UTC - in response to Message 1284801.  

Yes they should, and quite rightly too.

Anyone want to argue?????





Not me Im all for them.
[/quote]

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Message 1284807 - Posted: 17 Sep 2012, 14:52:34 UTC - in response to Message 1284805.  

the USPGA is a non profit. Even though they taking in $$$ millions, once they've plated their golf carts with gold and give away the remainder, they technically are not for profit.

The big problem with not for profits are that they aren't created equally.

I think most folks think of not for profits as liberal "help the poor" shoestring budget organizations that operate out of rented space in a dingy part of town.

Clearly this isn't always the case


In a rich man's house there is no place to spit but his face.
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Message 1284816 - Posted: 17 Sep 2012, 15:14:50 UTC - in response to Message 1284807.  
Last modified: 17 Sep 2012, 15:15:00 UTC

I think most folks think of not for profits as liberal "help the poor" shoestring budget organizations that operate out of rented space in a dingy part of town.

Clearly this isn't always the case

Yes, frequently they are a charity set up to enrich the people running it by spending 99% of the donations on the executive salaries and fund raising expenses and drop as few dimes as possible on the charity cause they solicit for. All perfectly legal of course.

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Message boards : Politics : Why are private country clubs allowed "non profit" status....!


 
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