Instructions For Schedule C (Form 990 Or 990-Ez)

1. Lobbying and political expenditures

Subtract dues, assessments, and

to the 2018 Schedule C (Form 990 or

carried over from the preceding tax year.

similar amounts (line 1) from lobbying and

990-EZ), Part III-B, line 2b.

political expenditures (line 2c) to

2. An amount equal to the taxable

See the instructions for Part III-B, line 5,

determine the excess amount to be

lobbying and political expenditures

for the treatment of the $500.

carried over to the following tax year and

reported on Part III-B, line 5 for the

Organization B. Dues, assessments,

reported on Part III-B, line 2b (carryover

preceding tax year, if the organization

and similar amounts received in 2017

lobbying and political expenditures), or its

received a waiver of the proxy tax

were less than lobbying expenses for

equivalent, on the next year Schedule C

imposed on that amount.

2017.

(Form 990 or 990-EZ) along with the

amounts the organization agreed to

Line 3. Enter the total amount of dues,

Workpapers (for 2017 Form

carryover on line 4.

assessments, and similar amounts

990) — Organization B

received, for which members were timely

Underreporting of lobbying expenses.

notified of the nondeductibility under

An organization is subject to the proxy tax

1. Total dues, assessments,

section 162(e) that were allocable to the

for the 2017 reporting year for

etc., received

$400

2017 reporting year.

underreported lobbying and political

2. Lobbying expenses paid or

expenses only to the extent that these

Example.

incurred

$600

expenses (if actually reported) would have

Membership dues: $100,000 for the

3. Less: Total nondeductible

resulted in a proxy tax liability for that year.

2017 reporting year,

100

amount of dues notices

A waiver of proxy tax for the tax year

Organization's timely notices to

4. Subtract line 3 from both lines

applies to reported expenditures only.

members: 25% (0.25) of membership

$300

$500

1 and 2

dues nondeductible, and

An organization that under reports its

5. Taxable amount of lobbying

Line 3 entry: $25,000.

expenses (smaller of the two

lobbying and political expenses is also

$300

amounts on line 4)

subject to the section 6652(c) daily

Line 4. If the amount on line 2c exceeds

penalty for filing an incomplete or

the amount on line 3 and the organization

The amounts on lines 1, 2, 3, and

inaccurate return. See Instructions for

sent dues notices to its members at the

5 of the workpapers were entered

TIP

Form 990 General Instructions H.

time of assessment or payment of dues,

on the 2017 Schedule C (Form

Failure-to-File Penalties, and Instructions

include the amount on line 4 that the

990 or 990-EZ), Part III-B, lines 1, 2c, 3,

for Form 990-EZ General Instructions G.

organization agrees to carryover to the

and 5.

Failure-to-File Penalties.

reasonable estimate of nondeductible

Because dues, assessments, and

lobbying and political expenditure next

Examples. Organizations A, B, and C:

similar amounts received were less than

year and include the amount on the 2017

1. Reported on the calendar year

lobbying expenses, excess lobbying

Schedule C (Form 990 or 990-EZ), in Part

basis,

expenses of $200 must be carried forward

III-B, line 2b (carryover lobbying and

2. Incurred only grassroots lobbying

to the 2018 Schedule C (Form 990 or

political expenses), or its equivalent.

expenses (didn't qualify for the under

990-EZ) Part III-B, line 2b (excess of $600

If the organization didn’t send notices

$2,000 in-house lobbying exception (de

of lobbying expenses over $400 dues,

to its members, enter “-0-” on line 4.

minimis rule)), and

etc., received). The $200 will be included

Line 5. The taxable amount reportable on

along with the other lobbying and political

3. Allocated dues to the tax year in

line 5 is the amount of dues, assessments,

expenses paid or incurred in the 2018

which they were received.

and similar amounts received:

reporting year.

Organization A. Dues, assessments,

1. Allocable to the 2017 reporting

See the instructions for Part III-B, line 5,

and similar amounts received in 2017

year, and

for the treatment of the $300.

were greater than its lobbying expenses

2. Attributable to lobbying and political

for 2017.

Organization C. Dues, assessments,

expenditures that the organization didn’t

and similar amounts received in 2017

Workpapers (for 2017 Form

timely notify its members were

were greater than lobbying expenses for

nondeductible.

990) — Organization A

2017 and the organization agreed to

carryover a portion of its excess lobbying

Report the tax on Form 990-T.

and political expenses to the next year.

1. Total dues, assessments,

If the amount on line 1 (dues,

etc., received

$800

assessments, and similar amounts) is

Workpapers (for 2017 Form

2. Lobbying expenses paid or

greater than the amount on line 2c (total

990) — Organization C

incurred

$600

lobbying and political expenditures), then

3. Less: Total nondeductible

subtract the nondeductible dues shown in

100

amount of dues notices

1. Total dues, assessments,

notices (line 3) and the carryover amount

4. Subtract line 3 from both

etc., received

$800

(line 4) from the total lobbying and political

$700 $500

lines 1 and 2

2. Lobbying expenses paid or

expenditures (line 2c) to determine the

5. Taxable amount of lobbying

incurred

$600

taxable amount of lobbying and political

expenses (smaller of the two

3. Less: Total nondeductible

$500

expenditures (line 5).

amounts on line 4)

100

amount of dues notices

If the amount on line 1 (dues,

4. Less: Amount agreed to

The amounts on lines 1, 2, 3, and

100

assessments, and similar amounts) is less

carryover

5 of the workpapers were entered

TIP

than the amount on line 2c (total lobbying

5. Subtract line 3 and 4 from

on the 2017 Schedule C (Form

$600

$400

and political expenditures), then subtract

both lines 1 and 2

990 or 990-EZ), Part III-B, lines 1, 2c, 3,

the nondeductible dues shown in notices

6. Taxable amount of lobbying

and 5.

(line 3) and the carryover amount (line 4)

expenses (smaller of the two

$400

amounts on line 5)

from dues, assessments, and similar

Because dues, assessments, and

amounts (line 1) to determine the taxable

similar amounts received were greater

lobbying and political expenditures

than lobbying expenses, there is no

(line 5).

carryovers of excess lobbying expenses

Instructions for Schedule C (Form 990 or 990-EZ)

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Instructions For Schedule C (Form 990 Or 990-Ez) - 2016 Page 8

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