LAW OFFICES OF RL JOHNSON
Disclaimer: The information provided herein is provided for informational purposes only and does not purport and is not intended to solicit, initiate, or form an
Attorney-Client relationship. Moreover, while some of the information found on this site is based on laws and court rulings, it is not intended to be legal advice and must
not be relied upon as legal advice on specific facts.
Attorney-Client relationship. Moreover, while some of the information found on this site is based on laws and court rulings, it is not intended to be legal advice and must
not be relied upon as legal advice on specific facts.
| Law Offices of RL Johnson | Copyright © 2007 All Rights Reserved. |
Member of Michigan Business Directory
Legal Services for Businesses
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LOCATIONS
MAIN OFFICE
Livonia Michigan
39111 Six Mile Road
Livonia, Michigan 48152
Tel.: (734) 521-2501
Fax: (800) 597-0284
Our Other Locations
- Southfield Michigan
Call for an appointment: (800) 597-0284
Bloomfield Hills Michigan
Call for an appointment: (888) 443-4146
Novi Michigan
Call for an appointment: (800) 545-8930
LOBBYING
Section 501(c)(3) of the Internal Revenue Code grants tax exemption to certain nonprofit organizations "no
substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence
legislation."
The IRS requires the inclusion of certain language as a condition of granting a tax-exempt status to a nonprofit
corporation. This language restricts the purposes of the organization to those permitted under the particular tax
exemption, may restrict the ability of the organization to benefit persons that are affiliated with the
organization, may restrict the ability of the organization to take part in political or lobbying activities, and that
controls the disposition of the assets upon the dissolution of the corporation.
Indeed, in Regan v. Taxation with Representation, 461 U.S. 540 (1983) the U.S. Supreme Court told us that no
substantial portion of a 501(c)(3)’s assets may be dedicated to legislative activity. What determines how much
is substantial? Courts have held that as little as 5% of an organization’s expenditures can be deemed a
substantial part under certain circumstances. Consequently, if a nonprofit needs or intends to engage in
legislative activity, it would be wise to make the “h election.”
A 501(c)(3) may, however, under section 501(h) of the Internal Revenue Code elect to dedicate a percentage of
its expenditures to legislative activity with the caveat that the organization may lose its exempt status if its
lobbying expenditures exceed the permitted amounts by more than 50% over a 4-year period. Thus, if the
stringent accounts measures must be put into place and there are state requirement regulating “lobbying.”
Click here to view IRS Form 5768.
We are nonprofit specialists with years of experience in this area. Whether you’re considering the benefits of
forming a nonprofit or looking for legal support for an existing organization, we can help. Please give us a call
to discuss your business needs. Please give us a call to discuss your business needs.
Section 501(c)(3) of the Internal Revenue Code grants tax exemption to certain nonprofit organizations "no
substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence
legislation."
The IRS requires the inclusion of certain language as a condition of granting a tax-exempt status to a nonprofit
corporation. This language restricts the purposes of the organization to those permitted under the particular tax
exemption, may restrict the ability of the organization to benefit persons that are affiliated with the
organization, may restrict the ability of the organization to take part in political or lobbying activities, and that
controls the disposition of the assets upon the dissolution of the corporation.
Indeed, in Regan v. Taxation with Representation, 461 U.S. 540 (1983) the U.S. Supreme Court told us that no
substantial portion of a 501(c)(3)’s assets may be dedicated to legislative activity. What determines how much
is substantial? Courts have held that as little as 5% of an organization’s expenditures can be deemed a
substantial part under certain circumstances. Consequently, if a nonprofit needs or intends to engage in
legislative activity, it would be wise to make the “h election.”
- The 501(h) Election
A 501(c)(3) may, however, under section 501(h) of the Internal Revenue Code elect to dedicate a percentage of
its expenditures to legislative activity with the caveat that the organization may lose its exempt status if its
lobbying expenditures exceed the permitted amounts by more than 50% over a 4-year period. Thus, if the
stringent accounts measures must be put into place and there are state requirement regulating “lobbying.”
Click here to view IRS Form 5768.
We are nonprofit specialists with years of experience in this area. Whether you’re considering the benefits of
forming a nonprofit or looking for legal support for an existing organization, we can help. Please give us a call
to discuss your business needs. Please give us a call to discuss your business needs.
Schedule a Free Consultation or Request More Information
Use the following form to schedule a free consultation or to get more information about our company or services.
Use the following form to schedule a free consultation or to get more information about our company or services.
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