The Law of Tax-Exempt Organizations, 2021 Cumulative Supplement. Bruce R. Hopkins

Notes

      1 ¹¹³ See §§ 7.8, text accompanied by notes 321.1–321.5; 20.13(a).

      2 ^113.1 Priv. Ltr. Rul. 201843016.

      3 ^113.2 Priv. Ltr. Rul. 201906010.

      4 ^133.1 Priv. Ltr. Rul. 202013016.

      5 ^133.2 Priv. Ltr. Rul. 202017028.

      6 ^191.1 Priv. Ltr. Rul. 201907007.

      7 ^191.2 Priv. Ltr. Rul. 201944014.

      8 ^191.3 Priv. Ltr. Rul. 202015022.

      9 ^191.4 Priv. Ltr. Rul. 202015025.

      10 ¹⁹¹ Priv. Ltr. Rul. 202034010.

      11 ^199.1 E.g., Priv. Ltr. Rul. 201511024.

      12 ^199.2 Priv. Ltr. Rul. 201820020.

      13 ^199.3 Priv. Ltr. Rul. 201924019.

      14 ^199.4 Priv. Ltr. Rul. 201931010.

      15 ^217.1 See § 20.13(a).

      16 ^217.2 See § 20.3.

      17 ^217.3 See § 14.2(c)(i), (ii).

      18 ^217.4 Priv. Ltr. Rul. 201931013.

CHAPTER FIFTEEN Social Clubs

        § 15.1 Social Clubs in General (b) Club Functions

        § 15.4 Exceptions to Limitations

        § 15.5 Taxation of Social Clubs

§ 15.1 SOCIAL CLUBS IN GENERAL

      (b) Club Functions

       p. 365, carryover paragraph. Insert as last sentences:

As still other examples, a membership organization of football officials functioning in public school districts was denied recognition of tax exemption in part because of lack of “social commingling or fellowship” among its members; the only gatherings were training sessions, which were not mandatory.^15.1 The same held for a membership entity whose members met weekly to make decisions and take advantage of opportunities within its local business region.^15.2

       p. 366, note 31. Insert following existing text:

      A nonprofit organization that merely leases property to a tax‐exempt fraternity or sorority cannot qualify for exemption (e.g., Priv. Ltr. Rul. 201927023).

§ 15.4 EXCEPTIONS TO LIMITATIONS

       p. 372, second complete paragraph. Insert as last sentence:

In another instance, the IRS ruled that income from the sale of emission credits will not disturb a social club's tax exemption because the sale will be a new source of income for the club and the sale activity will be a nonrecurring event.^93.1

§ 15.5 TAXATION OF SOCIAL CLUBS

       p. 376, second complete paragraph, second and third sentences. Delete and insert:

This decision was affirmed; as to the factual issue of whether the club demonstrated a profit motive, the court of appeals conceded that “demonstrating profit motive without profitability proves difficult.”^120.1 Entities in this position, the appellate court continued, “generally must show that their intent to profit was thwarted somehow.”^120.2 It added: “When an organization is consistently unprofitable, even tougher.”^120.3 The court then stated this telltale observation: “Although courts review holistically all relevant facts and circumstances when deciding whether an activity is a business or hobby, a long history of consistent and unexplained losses can overwhelm all other factors.”^120.4 This club, the appellate court concluded, “never adduced any evidence that it attempted to stem its flood of losses, or that it expected to eventually profit.”^120.5

Notes

      1 ^15.1 Priv. Ltr. Rul. 201845030.

      2 ^15.2 Priv. Ltr. Rul. 201848017.

      3 ^93.1 Priv. Ltr. Rul. 202019027.

      4 ^120.1 Losantiville Country Club v. Comm'r, 906 F.3d 468, 474 (6th Cir. 2018).

      5 ^120.2 Id.

      6 ^120.3 Id.

      7 ^120.4 Id.

      8 ^120.5 Id.

CHAPTER SIXTEEN Labor, Agricultural, and Horticultural Organizations