[svlug] sbay benefit

[Rick Moen]

Quoting Bill Ward (bill at wards.net):

> Within 501(c) there are several sub types.  The "full fledged charity"
> is the 501(c)(3) where donations to the charity are tax deductible to
> the giver, and the charity pays no taxes.  The type that BayLISA and
> LUGoD are (probably) and that SBAY.org will be is the 501(c)(7) which
> has less stringent requirements, but that donations are not tax
> deductible.

This is correct.  (I'm way out of date, but decades ago was a tax
preparer and staff accountant working for CPA firms.)

I believe BayLISA, LUGOD, and SBAY all aspire to Internal Revenue Code 
section 501(c)(7) non-profit status, for which an entity must be
primarily a social/recreational non-profit group, tax exempt on income
being derived from members but with all other income still subject to
income tax.

Reality note:  I am reasonably certain that BayLISA has applied (via IRS
Form 1024) for and received an IRS determination letter conferring
501(c)(7) status, but am not certain about the other two.  BayLISA's tax
adviser Dan Miller would know for certain about its IRS status, and I
might have that information in my files but don't have it at my
fingertips at the moment.  (For more information on non-profits and
income tax, see IRS Publication 557,
http://www.irs.gov/publications/p557/  Specifically for the general
provisions concerning 501(c)(7) non-profits, see
http://www.irs.gov/publications/p557/ch04.html#d0e8109 .)

Further reality note:  IRS and Franchise Tax Board basically don't give
a damn about groups whose gross income is less than around $25,000, the
cutoff above which all non-profit groups are required to file annual
Form 990 or 990-EZ tax returns.  Every user group I've ever encountered
has been _way_ under the radar.

IANLAITG.  (I Am No Longer An Income Tax Geek.)  TINPTA.  (This Is Not
Professional Tax Advice.)