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Can club with a bar become a §501(c)7 corp?

Discussion in 'Uncategorized Threads' started by Porcupine, Nov 2, 2007.

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  1. Porcupine

    Porcupine Active Member

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    My R&G club is interested in becoming a §501(c)7 corporation, that is, a tax-exempt social club. Somewhere though I heard that a club with a liquor license and a bar can not become an exempt corporation. Can anyone confirm this? Thanks for any help.

    Porcupine
     
  2. lumper

    lumper TS Member

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

    They dont say yes or no so I would say no problem but be careful of the tax liabilities it might cause you all.
     
  3. 870

    870 Well-Known Member

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    Absolutely!

    501(c)(7) is the section for exempt social clubs, and a bar/restaurant for members is clearly within the scope of that section.

    Other types of tax exempts could have a problem if the social aspects for members became too great; but not a problem in a 501(c)(7). That is probably what is causing the confusion.

    There are a host of issues with nonmembers though.
     
  4. mobear

    mobear Member

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    Your best bet other than asking on here is to find a cpa, and a lawyer who does this specific kind of work and talk to them.
     
  5. JBrooks

    JBrooks TS Member

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    The 501 Section concerns the federal tax status of non-profit corporations. What governs how a non-profit operates or how it is classified is your state's non-profit corporation law.

    So, when you determine what kind of non-profit you are under your state's law, you then plug yourself into the appropriate subsection of the 501 Section.

    A CPA can determine what you are. If it is not what you want to be, an attorney can help you change it.
     
  6. capnrico

    capnrico TS Member

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    Insurance for an establishment that serves alcohol ain't cheap at all.

    You would need to estimate your sales and contact an insurance company. Then don't forget to tell them the other activities that are conducted there.

    Then you have that pesky alcohol sales and firearms deal. The ATF boys frown on that I know.

    A VFW had beer, booze, and firearms at a Stag where they also gave away a brand new fishing boat and the boys with the big ATF shirts and coats shut it down and confiscated the guns.

    Guess what???? They haven't held a stag there in about 8 years now.
     
  7. W.P.T.

    W.P.T. TS Member

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    The Old Phoenix Club was a 501(c)7 corp ... The shoots were held under a secondary Corp set up by the club under the advisement of our accounting firm and the IRS people ... WPT ... (YAC) ...
     
  8. halfmile

    halfmile Well-Known Member

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    I think we are 501 (C3) AND WE HAVE A BAR. But we only sell beer, which is a class B license in Wis.

    If you are closed to outsiders you may have more leeway. And then you sell daily memberships to the people not on the roster. Like add a buck to their shooting costs.

    This bit of silliness is because of the stupid way some of these laws are worded. We do not have non member rounds any more, we have a "daily" membership that is purchased whenever a non member shoots a round. This was on a lawyer's advice supposedly.

    HM
     
  9. FN in MT

    FN in MT TS Member

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    WHY even open up the can of worms of having alcohol at a Gun Club?? You want to drink...go to a Bar.

    Personally I hate to see alcohol and firearms mixed.

    FN in MT
     
  10. halfmile

    halfmile Well-Known Member

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    Oh, gee not that stuff again. We chewed this cabbage over and over about 4 months ago. It's all about being responsible.

    If you want to pay more to shoot, don't have alcohol. We have beer. It's not "Booze", it's beer. Bud, Miller, etc. We also have lots of different types of soda.

    NObody drinks before shooting. No beer allowed on the fields. We close at 11:00, league lasts till 9:30. Many shooters go to the local watering holes after shooting to finish their night out.

    We have no incidents, no safety problems, and no divorce actions.

    Are we doing something wrong?

    If you feel people are not responsible then I guess you have to go without the income from serving.

    We did ban smoking, got lots of nasty feedback there.

    Do whatever the membership wants, I guess. If that's the popular method, more power to you.

    HM
     
  11. esoxhunter

    esoxhunter Well-Known Member

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    FN in MT. Hopefully if you want to drink and go to a bar; you wouldn't use a car to visit the bar; as I would imagine you also hate to to see alcohol and driving to be mixed. Personally, I hate to see people subjecting their views on other people. I am not going to get into a long drawn out discussion about how you or anyone else feels about the mixture of alcohol and firearms. (This has been done on this forum in the past) A gun club makes a lot of their revenue selling a can of beer that they paid $.75 a can to a member for $1.50. (AFTER they have completed their shooting for the day). That's 100% profit!! Save me your "holier than thou" opinions. If you don't want to associate with people at a gun club that serves alcohol; drive on by. We really don't care. By the way, you would be hard pressed to find a gun club in Wisconsin that doesn't serve alcohol; so if you ever visit Wisconsin, leave your gun at home. Your quote; "You want to drink...go to a bar; is something I agree with. I'll drink at the local Gun Clubs "Bar"; AFTER I have completed my shooting for the day. This will assist them to improve and/or maintain their operations. My opinion. ED
     
  12. 870

    870 Well-Known Member

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    WPT:

    Any chance you are familiar with the details of the second corporation you used? I am interested in how you had it set up. I assume it was used to avoid the problems with nonmembers of the club at registered shoots etc?

    Was it a taxable corporation owned by the club or was it owned by members?

    Thanks
     
  13. lumper

    lumper TS Member

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    I wonder if you could have a beer wench chick stop by the various fields as well and offer beer and drinks to the shooters like they do on the golf course?
     
  14. JBrooks

    JBrooks TS Member

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    If you sell beer, you better have really good insurance because you are one car wreck away from having someone else own your club if not your house.
     
  15. FN in MT

    FN in MT TS Member

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    ESOXHUNTER,

    All I said was "I hated to see alcohol and firearms mixed". But if YOU want to open the alcohol related can of worms why don't we.

    I just retired after thirty three years in the cop business. The last twenty two as a Trooper here in Montana. Montana has THE #1 highest alcohol death rate in the Country. Talking driving related deaths.

    Ever had to wake a Family up to tell them a loved one was injured or worse yet KILLED in an alcohol related accident? I've been to accidents with horrific injuries to innocent people that You NEVER forget. Injuries that change their lives forever.

    Just last week three young girls were walking home in Butte, MT. ALL three were struck by a drunk driver, killing one of them, at 14 years old at the scene. So to any of You that think I'm "up on my high horse" or on the "soapbox" I'm SO Sorry. I guess we are all entitled to our opinions.

    IF people drink after shooting , thats fine. Problem being...people DO drink, then still handle firearms , as well as shoot a few rounds. Shooting then handling guns do not mix with alcohol. I know it's a personal responsibility problem, and you should have the right to choose yourself. But when so many people are incapable of personal responsibility what is Society to do? Continue to pay the price in death and injury?

    Here in MT we are not talking a few drinks. Innocent fun with Your Buddies at the Gun Club. People here take overconsumption to a new level. It's a problem HERE that needs to be addressed.

    We want to get new shooters into the Sport? I for one don't want my child to be introduced to a shooting sport with a majority of the shooters; "under the influence". IMHO alcohol on Ranges sends a very bad message to new shooters and especially to young shooters. Guns and alcohol do not mix.

    FN in MT

    Frank Nowakowski



    In these Litigious times all it's going to take is someone being injured by a drinker leaving the Club, or the Family of a dead or injured Club member to sue the Club as well as the Board members into oblivion.
     
  16. tom berry

    tom berry Active Member

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    The answer to the original question is yes, but I seem to remember our tax people mentioning something to us about the % of revenue generated by the bar in relation to the % of revenue generated by the original purpose of the club.

    Before you all jump on the WI guys, you have to know that WI courts have strongly held that tavern owners can't be help responsible for their serving of alcohol to legal drinkers. While I agree that guns and alcohol don't mix well, the threat of loosing the club over an alcohol related traffic accident is very remote in the state of WI.

    Other states will vary on their laws regarding liquor.
     
  17. 870

    870 Well-Known Member

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    Many seem to be confused about what 501(c)(7) organizations are. There are no restrictions on the % of revenue from bar operations because operation of a bar is within the normal activities of a social club. Technically, the bar could be 100% of your activities, since 501(c)(7) is based on social interaction of members, not just shooting or conservation activities.

    Again, it is the nonmember issues that pose a problem for (c)(7)'s.
     
  18. lumper

    lumper TS Member

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    Ya know ... at many a club it is alright to have a beer from your own cooler after the shooting is done and nobody ever says a single dingle word so why open a bar and charge money for what they can do already unless your all greedy and want to make a gajillion dollars from being in the devil water business so you can use the money made from alcoholics and such to fund yourselves so you can shoot your fire sticks at those poor innocent and obviously scared targets just trying to get away from the drunkards shooting there booming thunder sticks ...

    Yeah ... a bar is legal and sounds like a fantastic idea.
     
  19. esoxhunter

    esoxhunter Well-Known Member

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    Well Frank; it is a pity that you hold such harsh feelings toward the people of Montana and their drunken behavior. (Who by the way paid your wages). You seem to believe that government is the answer in controlling irresponsible people. However, then when the "government" arrests these types of people; they are given the best of everything in our prison systems and let loose when serving 25% or less of their sentence. AND I know about that, as I retired as a Captain in the Wisconsin Department of Corrections. You haven't seen the "low lifes" that I worked with each and every day. You can't legislate morality, common sense or anything else. Bottom line, beer is a legal drink and I admit can be abused. However, I have been a member of a number of clubs and shot at many, many clubs which served alcohol. In the 50+ years I have been shooting, I saw no instance of a serious situation at a gun club that sold beer. Again, you don't like clubs that serve beer? That's your perogative; don't patronize them. Just don't push your "holier than thou" agenda on me or anyone else. Ed
     
  20. break25

    break25 TS Member

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    I would take 870 and halfmile advice.

    WPT

    I would also be interested in the Secondary Corp.
    Is there a POC for us to ask questions?


    CHAZZ
     
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