Election-year focus on lobbying and political activities of public charities.Political and lobbying activities undertaken by some charities have drawn recent scrutiny from the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. , Congress and the media. According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. a recent IRS report, political intervention by charities noticeably increased during the 2004 election season, with nearly 75% of the completed examinations revealing that the charities under examination had engaged in some degree of prohibited political activity.
The IRS's findings are especially relevant during this election year. Charities need to monitor closely their activities to avoid engaging in prohibited political or lobbying activities, which can trigger a variety of IRS sanctions. The rules for political and lobbying activities of public charities vary depending on the type, scope and amount of activity conducted.
Lobbying activities include attempts to influence legislation. Legislation includes action by Congress, state legislatures A state legislature may refer to a legislative branch or body of a political subdivision in a federal system.
The following legislatures exist in the following political subdivisions:
Inland Revenue, IR - a board of the British government that administers and collects major direct taxes . An organization attempts to influence legislation by contacting, or urging the public to contact, members or employees of a legislative body for the purposes of proposing, supporting or opposing legislation, or by advocating the adoption or rejection of legislation.
Public charities may engage in lobbying as long as it does not constitute a "substantial part" of their total activities. The Code uses one of two tests to determine whether a charity engages in a permissible level of lobbying: the "substantial part" test or the elective expenditure test.
Under the "substantial part" test of Sec. 501(c)(3), the IRS considers both quality and quantity. If it determines a public charity has engaged in excessive lobbying activities, it may revoke To annul or make void by recalling or taking back; to cancel, rescind, repeal, or reverse.
revoke v. to annul or cancel an act, particularly a statement, document, or promise, as if it no longer existed. the charity's tax-exempt status. Also, with the exception of churches, the Service may impose excise taxes excise taxes, governmental levies on specific goods produced and consumed inside a country. They differ from tariffs, which usually apply only to foreign-made goods, and from sales taxes, which typically apply to all commodities other than those specifically exempted. on both the organization and its managers.
On the other hand, Sec. 501(c)(3) organizations (other than churches and private foundations) can elect the expenditure test under Sec. 501(h). This election provides an alternative mechanical method, under which the charity's lobbying activities will not jeopardize jeop·ard·ize
tr.v. jeop·ard·ized, jeop·ard·iz·ing, jeop·ard·izes
To expose to loss or injury; imperil. See Synonyms at endanger. its tax-exempt status as long as its expenditures do not exceed certain limits. If the charity exceeds its lobbying expense Noun 1. lobbying expense - expenses incurred in promoting or evaluating legislation; "many lobbying expenses are deductible by a taxpayer"
disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to limit in any one year, it becomes subject to a 25% excise tax Excise Tax
1. An indirect tax charged on the sale of a particular good.
2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS.
1. on the excess expenditures. The charity may lose its tax-exempt status if it engages in excessive lobbying activity over a four-year period.
An organization may become involved in issues of public policy without engaging in lobbying activities. Activities that do not constitute lobbying include conducting (on a nonpartisan basis) educational meetings, preparing and distributing educational materials or considering public policy issues in an educational manner.
Political activities by charitable organizations This article is about charitable organizations. For other uses of the word charity, see Charity.
A charitable organization (also known as a charity) is an organization with charitable purposes only. are absolutely prohibited. Sec. 501(c)(3) organizations may not directly or indirectly participate, or intervene in, any political campaign on behalf of (or in opposition to) any candidate for public office. The prohibition applies to campaigns at the Federal, state and local levels. According to the IRS's report, a charity that violates these restrictions may be subject to written warnings, denial or revocation The recall of some power or authority that has been granted.
Revocation by the act of a party is intentional and voluntary, such as when a person cancels a Power of Attorney that he has given or a will that he has written. of tax-exempt status, or excise taxes. Examples of prohibited political activities include contributions to political campaign funds, public statements of position (either verbal or written) that favor or oppose a candidate, distributing statements prepared by others that favor or oppose a candidate, and allowing a candidate to use a charity's assets or facilities if other candidates are not given an equivalent opportunity.
A charity may invite political candidates to speak at its events without necessarily jeopardizing its tax-exempt status. The candidates may speak in their capacity as individuals or as candidates. For instance, a candidate might be a celebrity, a military leader or an expert in a nonpolitical field. In such a case, the charity could ask the candidate to speak about personal experiences. If, however, the candidate intends to speak on issues regarding a current political campaign, the charity must ensure that (1) it provides an equal opportunity to other political candidates seeking the same office, (2) it does not indicate any support of, or opposition to, the candidates (which should be stated explicitly in the introductions) and (3) there is no political fundraising.
Sec. 501(c)(3) charitable organizations can engage in "issue advocacy" by taking a position on public policy issues, but they must avoid issue advocacy that functions as political campaign intervention. The differentiating factor generally hinges Hinges may refer to:
There are no bright-line tests to determine whether a charity is involved in prohibited political campaign intervention. A charity might engage in several different activities, none of which constitutes political activity on its own. When viewed as a whole, however, the activities may indicate that the organization has engaged in political activity. When making its determination of whether a charity has violated the political campaign intervention rifles, the IRS will consider all relevant facts and circumstances.
FROM GRETCHEN KURHAJETZ, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. , WASHINGTON, DC