The IRS

Charities have been, and will continue to be, prime targets of IRS audits and rulings.

The IRS will be looking at tax-exempt organization's Web sites. One official has disclosed that the Internet will play a central role in future IRS audits in order to gather pertinent information. The Internet was said to provide access to such useful information for IRS examiners, that an internal memorandum has been issued authorizing employees to use the Internet for their research. One IRS branch chief went so far as to state that an Internet search could provide valuable information about a particular industry under examination. The IRS knows there is a wealth of information to be found on the Internet and that this information may generate additional tax dollars for the U.S Treasury.

Take solace in the fact that there does not appear to be any special attention directed at clubs electing to be 501(c)(7) tax-exempt. Even though the IRS has not expressed a written opinion on 501(c)(7) tax-exempt organization Web sites, this should not be interpreted to mean that clubs should ignore potentially damaging information found in their web pages until they're caught.