When to lobby – Clarifying murky rules

Nonprofit organizations can follow some simple guidelines to decide whether lobbying might hurt their tax-exempt status, The Wall Street Journal reported August 9.

The Journal cited a recent “informational letter” from the Internal Revenue Service to a lobbying arm of Independent Sector, a nonprofit trade group in Washington, D.C., that offers two general rules for lobbying by nonprofits, excluding churches.

Lobbying should make up “no substantial part” of a group’s activities, the IRS says, warning that nonprofits can get into trouble because “few definitions exist under this standard.”

The IRS also cites its sliding scale based on specific “dollar-based safe harbors that generally permit significantly more lobbying,” the Journal says.

The scale is based on a group’s annual budget and allows spending up to $1 million on total lobbying and up to $250,000 on grass-roots lobbying.

“This lays out in one-syllable words what charities can do,” Thomas  Troyer, a partner in the Washington, D.C., law firm Caplin & Drysdale told the Journal.

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