It is acceptable for the charitable assets of a society to be distributed to its members?

[Baofeng Ma]

"In certain tax-exempt organizations of a charitable or educational character, federal and state tax laws must be adhered to in the disposal of the organization's assets. Often such assets are distributed to societies with similar objectives, or to a superior body." RONR (12th ed.) 55:6-7

From above, I understand that the assets should belong to the public once an organization of an educational character (non profit and unincorporated) is dissolved, it is not acceptable to distribute cash in the society's account to its members, am I right? 

 

[Josh Martin]

On 3/14/2024 at 5:29 PM, Baofeng Ma said:

"In certain tax-exempt organizations of a charitable or educational character, federal and state tax laws must be adhered to in the disposal of the organization's assets. Often such assets are distributed to societies with similar objectives, or to a superior body." RONR (12th ed.) 55:6-7

From above, I understand that the assets should belong to the public once an organization of an educational character (non profit and unincorporated) is dissolved, it is not acceptable to distribute cash in the society's account to its members, am I right? 

This question is beyond the scope of RONR and this forum. All that RONR provides in this matter is that "In certain tax-exempt organizations of a charitable or educational character, federal and state tax laws must be adhered to in the disposal of the organization's assets." The text goes on to make some very general observations about what such laws might provide, but ultimately, questions concerning federal or state tax laws should be directed to an attorney or accountant.

[Gary Novosielski]

On 3/14/2024 at 6:29 PM, Baofeng Ma said:

"In certain tax-exempt organizations of a charitable or educational character, federal and state tax laws must be adhered to in the disposal of the organization's assets. Often such assets are distributed to societies with similar objectives, or to a superior body." RONR (12th ed.) 55:6-7

From above, I understand that the assets should belong to the public once an organization of an educational character (non profit and unincorporated) is dissolved, it is not acceptable to distribute cash in the society's account to its members, am I right? 

 

That's a question of IRS regulations, and should be addressed to a tax lawyer.