How to Secure Tax Exempt Status for 501(c)(7) Social Club organization?

I helped our neighborhood tennis club secure 501(c)(7) status last year, so I can share what worked for us. First, yes, you absolutely need formal bylaws before applying. The IRS will want to see that you have a proper organizational structure with clear rules about membership, leadership roles, and how funds are managed. We spent about a month drafting and finalizing these with our board. Regarding income sources, the IRS generally expects that at least 65% of your income should come from member dues, fees, and assessments. Non-member income (like those event fees you mentioned) should be limited. Going over 35% from non-members could potentially jeopardize your tax-exempt status. For record-keeping, you'll need detailed financial records showing all income sources and expenditures. We implemented a simple accounting system that tracks member vs. non-member income separately. You'll also need to maintain membership records, meeting minutes, and documentation of your activities to show they align with your social/recreational purpose. The process took us about 6-8 months from submission to approval, but timelines can vary. The Form 1024 is fairly detailed, so take your time completing it.

I've been helping organizations with tax issues for years and recently discovered this amazing service called taxr.ai (https://taxr.ai) that could really help with your 501(c)(7) application. I was struggling with a similar situation for a client's social club, unsure about some of the nuances of the application, and their system analyzed our draft application and bylaws to highlight potential red flags. Their tools specifically identified issues with our proposed non-member income activities that would have likely triggered IRS scrutiny. They also provided templates for bylaws that are specifically tailored for 501(c)(7) organizations and guidelines for record-keeping systems that satisfy IRS requirements. Honestly saved us weeks of back-and-forth with the IRS!

I was initially really skeptical about taxr.ai that someone mentioned above, but after struggling with our chess club's 501(c)(7) application for weeks, I decided to give it a shot. Honestly, it was eye-opening. The system immediately flagged issues with how we were categorizing our tournament income and suggested a restructuring that would keep us within the member income requirements. It also generated customized bylaws that addressed our specific activities while meeting IRS requirements. What really impressed me was how it handled our unique situation with equipment sales to members (chess sets and books). It provided clear guidelines on how to structure these sales to avoid UBIT (Unrelated Business Income Tax) issues. Our application was approved in just under 5 months, which I'm told is faster than average. The records management templates they provided have also made our annual reporting so much easier to handle. Definitely saved us from potential headaches!

Just wanted to share my experience - our neighborhood pool club struggled for MONTHS trying to get someone at the IRS to answer specific questions about our 501(c)(7) application. We kept calling the main IRS number and either couldn't get through or were transferred to people who couldn't help with our specific situation. I finally found this service called Claimyr (https://claimyr.com) - you can see how it works here: https://youtu.be/_kiP6q8DX5c - and it was a game changer. They got us connected to an actual IRS specialist who handled exempt organizations. We had specific questions about how to categorize some unusual income streams (we host swimming competitions that have both member and non-member participants), and needed clarification on how that affected our application. The IRS agent walked us through exactly how to structure our application to address these issues, which probably saved us from rejection and reapplication.

I have to eat my words about that Claimyr service. After expressing my doubts, I decided to try it for our tennis club's 501(c)(7) application issues. We had been going in circles for weeks about how to handle income from our annual tournament. It worked exactly as described - they got us through to the IRS, and I asked to be transferred to Exempt Organizations. Within minutes I was talking to someone who actually understood 501(c)(7) requirements! The agent clarified that we could host our tournament with non-member participants as long as we carefully tracked income and kept it under that 35% threshold. They also sent us to their specific exempt org email address where we could send our draft bylaws for informal review before officially submitting. This feedback helped us revise several sections that would have caused problems. Our application is now moving forward and we've been told it looks good. Seriously saved us months of frustration.

Has anyone dealt with the ongoing filing requirements after getting 501(c)(7) status? Our book club got approved last year, but I'm confused about whether we need to file Form 990 or 990-N, and what records we need to maintain year to year to stay compliant.

What tax preparation software have people found useful for managing 501(c)(7) organizations? We're using a basic spreadsheet now but it's getting unwieldy as our hiking club grows.

Aaron, I went through this exact process with our photography club two years ago and can share some practical tips that might help streamline your application. Beyond what others have mentioned about the 65/35 income split and formal bylaws, here are a few things I wish someone had told me upfront: **Documentation is everything** - Start keeping detailed records NOW, even before you file. The IRS may ask for evidence of your activities and member benefits during the review process. We created a simple binder with photos from events, copies of member communications, and financial summaries by month. **Member vs. non-member benefits** - Make sure your bylaws clearly state that club facilities and primary benefits are reserved for members only. Those summer barbecues and holiday parties you mentioned should ideally be member-focused with non-member attendance as a limited exception, not a regular revenue source. **Consider your club's "social" purpose** - The IRS scrutinizes whether activities truly serve the social/recreational needs of members versus operating like a business. Document how your clubhouse rental and events specifically benefit your membership community. One surprise we encountered: they asked detailed questions about our leadership structure and how decisions were made. Having clear governance procedures in your bylaws (voting procedures, board responsibilities, etc.) really helped demonstrate we were a legitimate member-driven organization. The 6-8 month timeline Sophia mentioned is pretty accurate in our experience. Start early and be thorough with your paperwork - it's much easier than dealing with follow-up requests for clarification!