2006 Instructions For Schedule A (Form 990 Or 990-Ez) (Page 11 of 15) in pdf

without incurring tax or losing its

To determine if an organization has

Communication with members. For

tax-exempt status.

spent excessive amounts on lobbying, the

purposes of section 4911, expenditures

organization must know which

for certain communications between an

Expenditure test. Under the

expenditures are lobbying expenditures

organization and its members are treated

expenditure test, there are limits both

and which are not lobbying expenditures.

more leniently than are communications

upon the amount of the organization’s

An electing public charity’s lobbying

to nonmembers. Expenditures for a

grassroots lobbying expenditures and

expenditures for a year are the sum of its

communication that refers to, and reflects

upon the total amount of its direct

expenditures during that year for (1) direct

a view on, specific legislation are not

lobbying and grassroots lobbying

lobbying communications (direct lobbying

lobbying expenditures if the

expenditures. If the electing public charity

expenditures) plus (2) grassroots lobbying

communication satisfies the following

does not meet this expenditure test, it will

communications (grassroots

requirements:

owe a section 4911 excise tax on its

expenditures).

1. The communication is directed only

excess lobbying expenditures. Moreover,

to members of the organization,

if over a 4-year averaging period the

Direct lobbying communications

2. The specific legislation the

organization’s average annual total

(direct lobbying expenditures). A direct

communication refers to, and reflects a

lobbying or grassroots lobbying

lobbying communication is any attempt to

view on, is of direct interest to the

expenditures are more than 150% of its

influence any legislation through

organization and its members,

dollar limits, the organization will lose its

communication with any:

•

3. The communication does not

exempt status.

Member or employee of a legislative

directly encourage the member to engage

body, or

The following terms are used in Part

•

in direct lobbying (whether individually or

Government official or employee (other

VI-A. See Regulations section 56.4911 for

through the organization), and

than a member or employee of a

details.

4. The communication does not

legislative body) who may participate in

Exempt purpose expenditures. The

directly encourage the member to engage

the formulation of the legislation, but only

amount an electing public charity may

in grassroots lobbying (whether

if the principal purpose of the

spend on lobbying (without incurring tax)

individually or through the organization).

communication is to influence legislation.

is a scaled percentage of the

Expenditures for a communication

A communication with a legislator or

organization’s exempt purpose

directed only to members that refers to,

government official will be treated as a

expenditures. In general, an expenditure

and reflects a view on, specific legislation

direct lobbying communication, if, but only

is an exempt purpose expenditure if it is

and that satisfies the requirements of

if, the communication:

paid or incurred by an electing public

•

paragraphs 1, 2, and 4, but does not

Refers to specific legislation, and

charity to accomplish the organization’s

•

satisfy the requirements of paragraph 3,

Reflects a view on such legislation.

exempt purpose.

are treated as expenditures for direct

Grassroots lobbying communications

In general, exempt purpose

lobbying.

(grassroots expenditures). A

expenditures are:

Expenditures for a communication

grassroots lobbying communication is any

1. The total amount paid or incurred

directed only to members that refers to,

attempt to influence any legislation

for religious, charitable, scientific, literary,

and reflects a view on, specific legislation

through an attempt to affect the opinions

or educational purposes, or for the

and satisfies the requirements of

of the general public or any part of the

prevention of cruelty to children or

paragraphs 1 and 2, but does not satisfy

general public.

animals, or to foster national or

the requirements of paragraph 4, are

international amateur sports competition

A communication is generally not a

treated as grassroots expenditures,

(not including providing athletic facilities

grassroots lobbying communication

whether or not the communication

or equipment, other than by qualified

unless (in addition to referring to specific

satisfies the requirements of paragraph 3.

amateur sports organizations described in

legislation and reflecting a view on that

See Regulations section 56.4911-5 for

section 501(j)(2)),

legislation) it encourages recipients to

details.

2. The allocable portion of

take action about the specific legislation.

There are special rules regarding

administrative expenses paid or incurred

A communication encourages a

certain paid mass media advertisements

for the above purposes,

recipient to take action when it:

about highly publicized legislation;

3. Amounts paid or incurred to try to

allocation of mixed purpose expenditures;

influence legislation, whether or not for

1. States that the recipient should

certain transfers treated as lobbying

the purposes described in 1 above,

contact legislators;

expenditures and special rules regarding

4. Allowance for depreciation or

2. States a legislator’s address, phone

lobbying on referenda, ballot initiatives,

amortization, and

number, etc.;

and similar procedures (see Regulations

5. Fundraising expenditures, except

3. Provides a petition, tear-off

sections 56.4911-2 and -3).

that exempt purpose expenditures do not

postcard, or similar material for the

include amounts paid to or incurred for

recipient to send to a legislator; or

Legislation. In general, the term

either the organization’s separate

4. Specifically identifies one or more

legislation includes Acts, bills, resolutions,

fundraising unit or other organizations, if

legislators who:

or similar items. Specific legislation

the amounts are primarily for fundraising.

includes both legislation that has already

a. Will vote on legislation;

been introduced in a legislative body and

b. Opposes the communication’s view

2006 Instructions For Schedule A (Form 990 Or 990-Ez) Page 11

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