Welch

The plaintiff having been required to pay the total sum of $12,509'.25 as a tax on dues and membership fees covering the period from August, 1924, to July 31,1927, brought this suit against the collector to recover the same. Its contention is that during the time mentioned it was not a social, athletic, or sporting club or organization. The statute in force at the time designated the three classes mentioned only as being liable for the payment of such taxes. ( 43 Stat. 321 ; unchanged in 1926 [26 USCA § 872 note]). The statute is now quoted from :

“See. 501. On and after the date this title takes effect there shall be levied, assessed, collected, and paid, in lieu of the taxes imposed by section 801 of the Revenue Act of 1921, a tax equivalent to 10 per centum of any amount paid on or after such date, for any period after such date, (a) as dues or membership fees (where the dues or fees of an active resident annual member are in excess of $10 per year) to any social, athletic, or sporting club or organization; or (b) 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…