MAJOR ANNOUNCEMENT ABOUT MIGRATION - PLEASE READ

[Gary Lewis]

With the documentation/information provided, we almost would meet 501c(3) definition as a provider of literary resources.

From what I'm reading 501c(7) group assets have to be exclusive to members (no more than 15% usage by the general public supposedly). Truck show entry would have to be member only. Forum and documentation access would likely also need to be member only. And all contributions would need a paper trail to confirm they were paid by a member (otherwise, the IRS assumes it's a nonmember). Main goal is recreation and members need to be able to directly contact each other. Honestly sounds more like a local gun club/range or conservation/country club than what we do.

Maybe 501c(3) is a better avenue?

Where did you get the 15% usage bit? Maybe I missed that.

I see a max of 15% contribution mentioned when it says "No more than 15 percent of the amount may be derived from use of the club’s facilities or services by the general public..." But if we don't solicit on FTE, FSB, or Facebook we won't be getting contributions from there. And we could easily suggest that people who aren't members become a member before they contribute. Right?

And I'm missing where it says the truck show would have to be members only. This IRS publication says:

Exemption Requirements

The club must be organized for exempt purposes.

The club must provide an opportunity for personal contact among members and membership must be limited.

The club must be supported by membership fees, dues, and assessments.

The organization’s net earnings may not inure to the benefit of any person having a personal and private interest in its activities.

If the club exceeds safe harbor guidelines for nonmember and investment income, the facts and circumstances must show that it is organized substantially for exempt purposes. See “Effect of Nonmember Income on Exempt Status" below for more information.

The club may receive de minimis income from nontraditional sources.

The club's governing instrument may not contain a provision that provides for discrimination against any person on the basis of race, color, or religion.

It doesn't say that the personal contact must be among members only. But that we provide an opportunity for personal contact. We do with the truck show.

And we are exclusive - the general public is not considered to be members. You must apply and be admitted. So we could have a meeting of the members the night before the show, meaning Friday night, and then the show on Saturday - just as we've done.

So, what am I missing? I'm not saying I know I'm right, so please push back when I go off the deep end.

[C.Jett]

Where did you get the 15% usage bit? Maybe I missed that.

I see a max of 15% contribution mentioned when it says "No more than 15 percent of the amount may be derived from use of the club’s facilities or services by the general public..." But if we don't solicit on FTE, FSB, or Facebook we won't be getting contributions from there. And we could easily suggest that people who aren't members become a member before they contribute. Right?

And I'm missing where it says the truck show would have to be members only. This IRS publication says:

Exemption Requirements

The club must be organized for exempt purposes.

The club must provide an opportunity for personal contact among members and membership must be limited.

The club must be supported by membership fees, dues, and assessments.

The organization’s net earnings may not inure to the benefit of any person having a personal and private interest in its activities.

If the club exceeds safe harbor guidelines for nonmember and investment income, the facts and circumstances must show that it is organized substantially for exempt purposes. See “Effect of Nonmember Income on Exempt Status" below for more information.

The club may receive de minimis income from nontraditional sources.

The club's governing instrument may not contain a provision that provides for discrimination against any person on the basis of race, color, or religion.

It doesn't say that the personal contact must be among members only. But that we provide an opportunity for personal contact. We do with the truck show.

And we are exclusive - the general public is not considered to be members. You must apply and be admitted. So we could have a meeting of the members the night before the show, meaning Friday night, and then the show on Saturday - just as we've done.

So, what am I missing? I'm not saying I know I'm right, so please push back when I go off the deep end.

Gary, “The club must be supported by membership fees, dues and assessments.” Are contributions an assessment? CJ

[C.Jett]

Interesting thought, CJ. And with 2000+ members it would only take half of them kicking in $1/year and we'd be there on an annual basis. And if all of them kicked in $1 initially we'd have enough for the migration.

But managing an annual levy looks onerous. On Nabble we don't have a way of doing a mass email to all users. And shipping all of them a sticker would be difficult as we have no physical address for the majority of them. Which is why I'm hoping to keep it to contributions.

However, initially my reading of the rules indicated that we may have problems getting accepted as a 501c7 with just contributions. The IRS publication Social Clubs – Requirements for Exemption – Support By Membership Dues says "A social club must be supported by membership fees, dues, and assessments. A section 501©(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 the amount may be derived from 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 nonmember income exceeding these limits, all the facts and circumstances will be considered in determining whether the club continues to qualify for exemption."

But what are "membership fees, dues, or assessments"? StackExchange answered the question of Do 501©(7) organizations have to charge dues or fees to members? There's a whole lot of info and it is a good read, but at the bottom it says "Thus, in a 501©(7) organization, a payment of dues, a payment of fees, and a donation, are all identical from a federal income tax perspective. But due and fees are gift tax exempt, while donations are taxable gifts for gift tax purposes (and are not entitled to the estate tax charitable deduction)."

So it looks like we can still go ahead with the plan to have it funded by contributions. But we will have to have a way to show where we are at any point in time toward the goal so people can contribute and help us out. And, we might want to monitor the contributions for that 35% limit if we get contributions from outside the membership. In other words, while the folks on other forums, like FTE & FSB, as well as the millions on Facebook, use our library we probably shouldn't go hat-in-hand to them or we might go over the "outside" limit.

Gary, a self addressed envelope with their dues would solve that problem? CJ

[Gary Lewis]

Gary, “The club must be supported by membership fees, dues and assessments.” Are contributions an assessment? CJ

The StackHouse site says " "Thus, in a 501©(7) organization, a payment of dues, a payment of fees, and a donation, are all identical from a federal income tax perspective." I also checked with my friend, the tax accountant, this morning at church and she agreed - to a 501c7 organization membership fees, dues, & assessments are tax deductible but contributions aren't. Otherwise they are all acceptable forms of support.

Gary, a self addressed envelope with their dues would solve that problem? CJ

Yes, if they sent me an SASE with money I could return the envelope with a sticker. But I'm still hoping to make this as easy as is possible. My thinking is that I'll get the bank account for the non-profit set up and then people can Venmo to it. That gives me tracking of who sent what and when, and will suffice for the annual IRS submittal.

[ratdude747]

Where did you get the 15% usage bit? Maybe I missed that.

I see a max of 15% contribution mentioned when it says "No more than 15 percent of the amount may be derived from use of the club’s facilities or services by the general public..." But if we don't solicit on FTE, FSB, or Facebook we won't be getting contributions from there. And we could easily suggest that people who aren't members become a member before they contribute. Right?

And I'm missing where it says the truck show would have to be members only. This IRS publication says:

Exemption Requirements

The club must be organized for exempt purposes.

The club must provide an opportunity for personal contact among members and membership must be limited.

The club must be supported by membership fees, dues, and assessments.

The organization’s net earnings may not inure to the benefit of any person having a personal and private interest in its activities.

If the club exceeds safe harbor guidelines for nonmember and investment income, the facts and circumstances must show that it is organized substantially for exempt purposes. See “Effect of Nonmember Income on Exempt Status" below for more information.

The club may receive de minimis income from nontraditional sources.

The club's governing instrument may not contain a provision that provides for discrimination against any person on the basis of race, color, or religion.

It doesn't say that the personal contact must be among members only. But that we provide an opportunity for personal contact. We do with the truck show.

And we are exclusive - the general public is not considered to be members. You must apply and be admitted. So we could have a meeting of the members the night before the show, meaning Friday night, and then the show on Saturday - just as we've done.

So, what am I missing? I'm not saying I know I'm right, so please push back when I go off the deep end.

I wasn't reading official IRS stuff... whoops.

But, here's the possible sticking point:

https://www.irs.gov/charities-non-profits/other-non-profits/social-clubs-requirements-for-exemption-limited-membership

Membership in a social club must be limited. A club that issues corporate memberships is dealing with the general public (the corporation’s employees) and is not exempt. Evidence that a club’s facilities will be open to the general public (persons other than members, their dependents or guests) may cause denial of exemption. This does not mean, however, that any dealing with outsiders will automatically disqualify a club from exemption.

Example: A country club regularly holds its golf course open to the general public, charging established green fees that are used to maintain and improve club facilities. The club does not qualify for exemption under Code section 501©(7) because it is engaged in business with the general public. In addition, income from this activity inures to the benefit of the members by reducing what they must pay to maintain and improve club facilities.

If the site counts as our facilities, then it would have to be closed to non-members to count... That said, it seems the rule exists weed out private enterprise from tax-exempt clubs.

[Gary Lewis]

I wasn't reading official IRS stuff... whoops.

But, here's the possible sticking point:

https://www.irs.gov/charities-non-profits/other-non-profits/social-clubs-requirements-for-exemption-limited-membership

Membership in a social club must be limited. A club that issues corporate memberships is dealing with the general public (the corporation’s employees) and is not exempt. Evidence that a club’s facilities will be open to the general public (persons other than members, their dependents or guests) may cause denial of exemption. This does not mean, however, that any dealing with outsiders will automatically disqualify a club from exemption.

Example: A country club regularly holds its golf course open to the general public, charging established green fees that are used to maintain and improve club facilities. The club does not qualify for exemption under Code section 501©(7) because it is engaged in business with the general public. In addition, income from this activity inures to the benefit of the members by reducing what they must pay to maintain and improve club facilities.

If the site counts as our facilities, then it would have to be closed to non-members to count... That said, it seems the rule exists weed out private enterprise from tax-exempt clubs.

I'll have to study that a bit, but I see your point, Larry.

It talks about "corporate membership" and we don't do that. Granted, we will admit anyone that wants to participate, but they cannot participate in the forum w/o joining. And it is through the forum that they get questions answered, pats on the back for having accomplished something, etc.

So while they can use the library w/o joining they cannot get the full benefit of the "club". And, in fact, while our library is by far the best there is on Bullnose trucks, there are other places where you can get some of those documents.

So I think we are good. In fact, I'm going to find out. I have the Oklahoma 501c7 filing requirements document and am working on meeting all of the requirements. The biggest of those is having a charter and bylaws, so I'm working on documenting them. I'll be back to y'all with a draft soon - I hope.

[Nothing Special]

.... Example: A country club regularly holds its golf course open to the general public, charging established green fees that are used to maintain and improve club facilities. The club does not qualify for exemption under Code section 501©(7) because it is engaged in business with the general public. In addition, income from this activity inures to the benefit of the members by reducing what they must pay to maintain and improve club facilities.....

I'm no more of an expert on this than any of you. But I think a significant part of being "engaged in business with the general public" in that example is "charging established green fees that are used to maintain and improve club facilities." Allowing people to use our "facilities" for free is very different from a country club charging people to use its facilities. I wouldn't see that as something that would exclude us from 501©(7) based on what was written there.

But what do I know.

[Gary Lewis]

.... Example: A country club regularly holds its golf course open to the general public, charging established green fees that are used to maintain and improve club facilities. The club does not qualify for exemption under Code section 501©(7) because it is engaged in business with the general public. In addition, income from this activity inures to the benefit of the members by reducing what they must pay to maintain and improve club facilities.....

I'm no more of an expert on this than any of you. But I think a significant part of being "engaged in business with the general public" in that example is "charging established green fees that are used to maintain and improve club facilities." Allowing people to use our "facilities" for free is very different from a country club charging people to use its facilities. I wouldn't see that as something that would exclude us from 501©(7) based on what was written there.

But what do I know.

Bob - I agree with you. But, what do I know?

I'll run the idea of access to the facilities by my tax advisor, but I think she will agree. While the general public can see and read what is written on the forum they cannot ask or answer questions without joining. And the forum is our main way of helping people. They ask a question and we answer with our experience in that area. Sometimes we give them a link to a document in the library or post a pic of a diagram or schematic, but they didn't know where it was - and we did.

[Nothing Special]

Bob - I agree with you. But, what do I know?

I'll run the idea of access to the facilities by my tax advisor, but I think she will agree. While the general public can see and read what is written on the forum they cannot ask or answer questions without joining. And the forum is our main way of helping people. They ask a question and we answer with our experience in that area. Sometimes we give them a link to a document in the library or post a pic of a diagram or schematic, but they didn't know where it was - and we did.

The way I'm reading it, it wouldn't matter what benefit "the general public" got from the site. As long as we didn't charge them we weren't "engaged in business" with them.

In other words, the country club example didn't say the club wouldn't qualify if they let the public play there for free, just if they charged the public (and the members then benefited from the money brought in).

[1986F150Six]

Mat - This isn't a funeral but a new beginning.

And yes, it needs to change to stay viable. Not necessarily to grow. That's because our forum is on Nabble, which is going to go away at some point. We aren't paying anything and the proprietor, Franklin, has let me know he will shut it down at some point in time. And given what I have seen, he will do so w/o any notice. (I'm not complaining as that is certainly his right.)

So we must go somewhere and we've done the research and testing and have settled on InVision. We know the cost to move our existing forum there and, while it is significant, it won't get any cheaper over time. So we should go now to keep the cost as low as possible, enjoy the benefits of the new environment longer, and not wake up some day to the place being shut down.

Gary, I speak for all of us who want to express our gratitude for all the effort you put into maintaining this forum!

I vote for the discreet offer of funding through your email address.