[svlug] Argument in Favor of SVLUG continuing as a SIG ofsbay.org

Chris Verges (chverges) chverges at cisco.com
Wed Feb 15 22:13:33 PST 2006


Hey Rick,

The IRS seems to indicate that a 501(c)7 is tax exempt so long as its
by-laws and/or charter do not discriminate based on race, color or
religion and they don't take any more than 35% of their gross receipts
from outside sources:

http://www.irs.gov/charities/nonprofits/article/0,,id=96189,00.html

Blockquote:

Support by Membership Dues Required:  In general, a club should be
supported solely by membership fees, dues, and assessments.  A section
501(c)(7) organization may receive up to 35 percent of its gross
receipts, including investment income, from sources outside of its
membership without losing its tax-exempt status. No more than 15 percent
of this amount may be derived from the use of the club's facilities or
services by the general public or from other activities not furthering
social or recreational purposes for members.  If an organization has
non-member income that exceeds these limits, all the facts and
circumstances will be considered in determining whether the club
continues to qualify for exempt status.

More information about the actual filing process:

http://www.irs.gov/publications/p557/ch04.html#d0e8109

Looks like it's a Form 1024.  Since SBAY does not fall under the
restrictive clauses, Ian's analysis is correct for SBAY's purposes.
Thanks for pointing out that there are some loopholes in it, though --
I'm sure SBAY will keep it in mind if/when they look for outside
funding.

(Disclaimer to cover my own ass: I'm not an accountant.  The text I've
written above is simply my layman interpretation of information found on
irs.gov.  Make sure you consult with a certified public accountant
before making any tax decisions.)

Thanks,

Chris Verges
-- 
chverges at cisco.com
408 525-0401



-----Original Message-----
From: svlug-bounces+chverges=cisco.com at svlug.org
[mailto:svlug-bounces+chverges=cisco.com at svlug.org] On Behalf Of Rick
Moen
Sent: Wednesday, February 15, 2006 9:00 PM
To: svlug at svlug.org
Subject: Re: [svlug] Argument in Favor of SVLUG continuing as a SIG
ofsbay.org

Quoting Ian Kluft (ikluft at thunder.sbay.org):

[I'll refrain from comment, except concerning two items:]

> As SVCS began to collapse a few years ago, they wouldn't even respond 
> to SVLUG, and then eventually disappeared.

SVCS's Web site remains continually out of date[1], but the group has in
no way "disappeared", and meetings occur monthly as always.
http://www.svcs.net/ (Note current-month meeting details for some SIGs,
e.g., Digital Imaging SIG at http://www.svcs.net/DISIG/SVCSImaging.html)

(I hear _somebody's_ been going around telling people that if SVLUG
resumes independence, it'll "disappear the way BAFUG did", when that
group recently separated from SBAY.  However, BAFUG = Bay Area FreeBSD
User Group actually remains quite healthy:  http://www.bafug.org/)

> (Note: as a 501(c)7 hobby club, though the organization will be exempt

> from paying taxes once the IRS confers this status....

This is sadly incorrect, and the group should make sure it understands
the tax provisions correctly.  You might wish to re-read IRS Publication
990, or at least this handy comparison chart:
http://members.aol.com/irsform1023/misc/comp501s.html

[1] This has always been the case, and in general you're best off
calling their general information number, 408-263-8768, rather than
looking to their Web site, for upcoming meeting details.  I just did,
and they're having one coming up about Microsoft Windows Vista, on the
3rd Thursday in March, which I'll recommend for those interested in the
topic.


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