Lobbying: What Does It Mean for Nonprofits?

OVERVIEW

Nonprofit organizations that conduct federal lobbying must be cognizant of at least two different definitions of lobbying in order to comply with applicable federal tax law and federal lobbying disclosure laws. Section 162(e) of the Internal Revenue Code (the "Code") defines "lobbying" and requires most tax-exempt organizations either to pay a proxy tax on lobbying expenditures or inform their members that a portion of their membership dues are non-deductible as a result of such expenditures. The federal Lobbying Disclosure Act (the "LDA") provides a second definition of "lobbying" and requires organizations to track and disclose the amount spent on such activities.

This QuickCounsel will review the definitions and reporting requirements for non-501(c)(3) tax-exempt organizations under federal tax law and under the LDA.