October 20, 1993
New Tax Law Affects Lobbying Expenses
WASHINGTON - The Internal Revenue Service issued guidance today
concerning dues received by certain tax-exempt organizations that
make lobbying and political expenditures. Generally, either a tax
may be imposed on these organizations, or members may no longer
deduct part of the dues paid.
Recently passed tax law now requires these tax-exempt
organizations to send notices to members specifying the portion of
the dues that is allocable to certain lobbying and political
expenditures made after 1993. Members are not allowed business
expense deductions for this portion of the dues. Generally, if the
notice does not specify an amount allocable to lobbying or political
expenditures, members may take a full deduction for the dues, but
the exempt organization may be liable for tax.
A tax may be imposed on a tax-exempt organization if it does
not send the notice, or if its notice underestimates the portion of
the dues allocable to lobbying and political expenditures made after
1993. Relief from the tax is provided in certain circumstances.
These rules do not apply to tax-exempt organizations described
in Internal Revenue Code section 501(c)(3).
Notice 93-55, relating to these rules will appear in Internal
Revenue Bulletin 1993-35, dated November 8, 1993.
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