I donu2019t know that lawyers or anyone else u2018abusesu2022 (c)(7) social clubs, but Iu2019m sure like every other tax law somebody somewhere has abused that part of the tax code.For those interested, a (c)(7) social club is a member owned nonprofit social club like a boat club, country club, or in my world a flying club.You canu2019t take a tax deduction for contributing to a c7, but the club doesnu2019t pay income on profits if the club stays within fairly strict guidelines on what the club can and canu2019t do in the way of making a profit.In no case may a c7 social club return any income above expenses to any member.Also, the IRS wants to be sure that the social club is really social, there has to be regular social activities of the members or the IRS will take the c7 status away and probably fine the club.Social Clubs | Internal Revenue Service