Membership Company Can’t Claim Tax Exempt Status, IRS Says

A local member discount business cannot qualify for tax exempt status usually provided to chambers of commerce and boards of trade, the IRS said.

The tax agency concluded in a written determination dated Aug. 26 and published Friday that an unnamed company providing discounts to its members’ employees did not quality for a nonprofit tax-exempt status under IRC Section 501(c)(6) for failing to promote a common interest within a particular industry.

The status, which would have spared the business from paying federal income tax if it qualified, is typically granted to business and trade groups due to their ...