Here's How Yale's Secret Societies Get Away With Paying Zero Taxes

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Here’s something we learned today about Yale’s clandestine (well, maybe not anymore) secret society system: each landed society (think Skull and Bones, Scroll and Key and Wolf’s Head) is registered with the IRS under “public charity” status.Clever, right?

It’s a move, The Yale Herald tells us, that was made years ago so that each could be exempt from federal income tax and so that their alumni (who by and large finance club operations) could receive tax deductions for their charitable giving.

John Simon, a professor at Yale Law School, tells The Herald that this process is surprisingly simple and can be done one of two ways (from The Herald):

“First, they can pass a ‘public’ support test, which essentially requires that at least one-third of their receipts come from small donors and no more than one-third come from investment income. Or, they can prove their own support of an existing public charity–e.g., Yale University.”

One society, who opted for the latter of Professor Simon’s tests, conducts regular educational programs for members, topics ranging from homeland security to corporate governance.

We wouldn’t be surprised if they brought in some big deal alums to teach.

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