Senate Report No. 94-1318

1976-2 C.B. 597 (1976)

From our private database of 47,500+ case briefs, written and edited by humans—never with AI.

Senate Report No. 94-1318

United States Senate
1976-2 C.B. 597 (1976)

  • Written by Daniel Clark, JD

Facts

With the passage of the Revenue Act of 1950 (1950 act), Congress imposed an income tax on some, but not all, otherwise-tax-exempt organizations on the income those organizations made on business activities unrelated to the organizations’ tax-exempt purposes. With the passage of the Tax Reform Act of 1969 (1969 act), Congress extended this unrelated-business taxable income (UBTI) to almost all tax-exempt organizations, including § 501(c)(7) social clubs. Before the passage of the 1969 act, the Internal Revenue Service (IRS) established an auditing practice whereby the IRS would not scrutinize a § 501(c)(7) organization as long as no more than 5 percent of the organization’s gross receipts came from nonmembers of the organization. After the passage of the 1969 act, Congress concluded that the IRS’s 5 percent test was no longer necessary. In response, Congress amended the tax laws. The Senate’s Committee on Finance issued a report explaining the changes to the law.

Rule of Law

Issue

Holding and Reasoning ()

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 964,000 law students since 2011. Some law schools even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 964,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 47,500 briefs, keyed to 1,006 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.
  • AI-generated podcast version of every brief — listen on the go, between classes, or whenever reading isn’t an option. New

Access this case brief for FREE

With a 7-day free trial membership
Here's why 964,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 47,500 briefs - keyed to 1,006 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership

Casebooks

Taxation of Nonprofit and Exempt Organizations

Key Terms

  • Unrelated business taxable income (UBTI)Income regularly generated by a tax-exempt entity by means of taxable activities.
  • Tax-Exempt OrganizationAn organization that is organized and operated exclusively for charitable, educational, or other qualifying purposes and is thus eligible for tax-exempt status under Internal Revenue Code § 501(c).
  • Social ClubAn organization that may qualify for tax-exempt status under § 501(c)(7) of the Internal Revenue Code if it is organized and operated exclusively for pleasure, recreation, or some other nonprofitable purpose.

Understand your casebook readings in seconds

Use our case briefs to comprehend your casebook readings faster, supplement your notes and outlines, and outshine your peers in class.

Get instant access to over 47,500+ expert-written case briefs in a searchable database keyed to 1,006 law school casebooks.

Case book preview
Start your free 7-day trial