CODIFICATION OF INTERNAL REVENUE LAWS SUBCHAPTER B-DUES SEC 1710. TAX. (a) RATE.- There shall be levied, assessed, collected, and paid- (1) DUEs OR MEMBERSHIP FEEs. -A tax equivalent to 10 per centum of any amount paid as dues or membership fees to any social, athletic, or sporting club or organization, if the dues or fees of an active resident annual member are in excess of $25 per year. (2) INITIATION rEE.- A tax equivalent to 10 per centum of any amount paid as initiation fees to such a club or organization, if such fees amount to more than $10, or if the dues or membership fees, not including initiation fees, of an active resident annual member are in excess of $25 per year. (3) LIE MEMBERSHIPS.- In the case of life memberships, a tax equivalent to the tax upon the amount paid by active resident annual members for dues or membership fees other than assess- ments, but no tax shall be paid upon the amount paid for life membership. In such a case, the tax shall be paid annually at the time for the payment of dues by active resident annual members. (b) BY WHOM PAI. -The taxes imposed by subdivision (a) shall be paid by the person paying such dues or fees, or holding such life membership. SEC. 1711. EXEMPTIONS FROM TAX. There shall be exempted from the provisions of section 1710 all amounts paid as dues or fees to a fraternal society, order, or associa- tion, operating under the lodge system, or to any local fraternal organization among the students of a college or university. SEC. 1712. DEFINITIONS. As used in this subchapter- (a) DUES. -The term "dues" includes any assessment irrespective of the purpose for which made; and (b) INITIATION FEEs.-The term "initiation fees" includes any pay- ment, contribution, or loan, required as a condition precedent to membership, whether or not any such payment, contribution or loan is evidenced by a certificate of interest or indebtedness or share of stock, and irrespective of the person or organization to whom paid, contributed, or loaned. SUBCHAPTER C-PROVISIONS COMMON TO ADMISSIONS AND DUES SEC. 1715. PAYMENT OF TAX. (a) COLLECTION BY RECIPIENT OF ADMISSIONS, DUES, AND FEES. - Every person receiving any payments for admission, dues, or fees, subject to the tax imposed by section 1700 or 1710 shall collect the amount thereof from the person making such payments. Every club or organization having life members shall collect from such members the amount of the tax imposed by section 1710. (b) PLACE FOR PAYMENT. -The taxes collected under subsection (a) shall be paid to the collector of the district in which the principal office or place of business is located. (c) TIME FOR PAYMENT. -The tax shall, without assessment by the Commissioner or notice from the collector, be due and payable to the collector at the time fixed for filing the return. (d) EXCESS PAYMEWTS. - (1) Any person making a refund of any payment upon which tax is collected under this section may repay therewith the amount of the tax collected on such payment; and the amount so repaid may be credited against amounts included in any subsequent re- turn. 192
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