
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC4911]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                 Subtitle D--Miscellaneous Excise Taxes
 
                      CHAPTER 41--PUBLIC CHARITIES
 
Sec. 4911. Tax on excess expenditures to influence legislation


(a) Tax imposed

                           (1) In general

        There is hereby imposed on the excess lobbying expenditures of 
    any organization to which this section applies a tax equal to 25 
    percent of the amount of the excess lobbying expenditures for the 
    taxable year.

           (2) Organizations to which this section applies

        This section applies to any organization with respect to which 
    an election under section 501(h) (relating to lobbying expenditures 
    by public charities) is in effect for the taxable year.

(b) Excess lobbying expenditures

    For purposes of this section, the term ``excess lobbying 
expenditures'' means, for a taxable year, the greater of--
        (1) the amount by which the lobbying expenditures made by the 
    organization during the taxable year exceed the lobbying nontaxable 
    amount for such organization for such taxable year, or
        (2) the amount by which the grass roots expenditures made by the 
    organization during the taxable year exceed the grass roots 
    nontaxable amount for such organization for such taxable year.

(c) Definitions

    For purposes of this section--

                      (1) Lobbying expenditures

        The term ``lobbying expenditures'' means expenditures for the 
    purpose of influencing legislation (as defined in subsection (d)).

                   (2) Lobbying nontaxable amount

        The lobbying nontaxable amount for any organization for any 
    taxable year is the lesser of (A) $1,000,000 or (B) the amount 
    determined under the following table:


      If the exempt purpose
       expenditures are--          The lobbying nontaxable   amount is--

Not over $500,000...............  20 percent of the exempt purpose
                                   expenditures.
Over $500,000 but not over        $100,000, plus 15 percent of the
 $1,000,000.                       excess of the exempt purpose
                                   expenditures over $500,000.
Over $1,000,000 but not over      $175,000 plus 10 percent of the excess
 $1,500,000.                       of the exempt purpose expenditures
                                   over $1,000,000.
Over $1,500,000.................  $225,000 plus 5 percent of the excess
                                   of the exempt purpose expenditures
                                   over $1,500,000.


                    (3) Grass roots expenditures

        The term ``grass roots expenditures'' means expenditures for the 
    purpose of influencing legislation (as defined in subsection (d) 
    without regard to paragraph (1)(B) thereof).

                  (4) Grass roots nontaxable amount

        The grass roots nontaxable amount for any organization for any 
    taxable year is 25 percent of the lobbying nontaxable amount 
    (determined under paragraph (2)) for such organization for such 
    taxable year.

(d) Influencing legislation

                          (1) General rule

        Except as otherwise provided in paragraph (2), for purposes of 
    this section, the term ``influencing legislation'' means--
            (A) any attempt to influence any legislation through an 
        attempt to affect the opinions of the general public or any 
        segment thereof, and
            (B) any attempt to influence any legislation through 
        communication with any member or employee of a legislative body, 
        or with any government official or employee who may participate 
        in the formulation of the legislation.

                           (2) Exceptions

        For purposes of this section, the term ``influencing 
    legislation'', with respect to an organization, does not include--
            (A) making available the results of nonpartisan analysis, 
        study, or research;
            (B) providing of technical advice or assistance (where such 
        advice would otherwise constitute the influencing of 
        legislation) to a governmental body or to a committee or other 
        subdivision thereof in response to a written request by such 
        body or subdivision, as the case may be;
            (C) appearances before, or communications to, any 
        legislative body with respect to a possible decision of such 
        body which might affect the existence of the organization, its 
        powers and duties, tax-exempt status, or the deduction of 
        contributions to the organization;
            (D) communications between the organization and its bona 
        fide members with respect to legislation or proposed legislation 
        of direct interest to the organization and such members, other 
        than communications described in paragraph (3); and
            (E) any communication with a governmental official or 
        employee, other than--
                (i) a communication with a member or employee of a 
            legislative body (where such communication would otherwise 
            constitute the influencing of legislation), or
                (ii) a communication the principal purpose of which is 
            to influence legislation.

                   (3) Communications with members

        (A) A communication between an organization and any bona fide 
    member of such organization to directly encourage such member to 
    communicate as provided in paragraph (1)(B) shall be treated as a 
    communication described in paragraph (1)(B).
        (B) A communication between an organization and any bona fide 
    member of such organization to directly encourage such member to 
    urge persons other than members to communicate as provided in either 
    subparagraph (A) or subparagraph (B) of paragraph (1) shall be 
    treated as a communication described in paragraph (1)(A).

(e) Other definitions and special rules

    For purposes of this section--

                   (1) Exempt purpose expenditures

        (A) In general

            The term ``exempt purpose expenditures'' means, with respect 
        to any organization for any taxable year, the total of the 
        amounts paid or incurred by such organization to accomplish 
        purposes described in section 170(c)(2)(B) (relating to 
        religious, charitable, educational, etc., purposes).

        (B) Certain amounts included

            The term ``exempt purpose expenditures'' includes--
                (i) administrative expenses paid or incurred for 
            purposes described in section 170(c)(2)(B), and
                (ii) amounts paid or incurred for the purpose of 
            influencing legislation (whether or not for purposes 
            described in section 170(c)(2)(B)).

        (C) Certain amounts excluded

            The term ``exempt purpose expenditures'' does not include 
        amounts paid or incurred to or for--
                (i) a separate fundraising unit of such organization, or
                (ii) one or more other organizations, if such amounts 
            are paid or incurred primarily for fundraising.

                           (2) Legislation

        The term ``legislation'' includes action with respect to Acts, 
    bills, resolutions, or similar items by the Congress, any State 
    legislature, any local council, or similar governing body, or by the 
    public in a referendum, initiative, constitutional amendment, or 
    similar procedure.

                             (3) Action

        The term ``action'' is limited to the introduction, amendment, 
    enactment, defeat, or repeal of Acts, bills, resolutions, or similar 
    items.

           (4) Depreciation, etc., treated as expenditures

        In computing expenditures paid or incurred for the purpose of 
    influencing legislation (within the meaning of subsection (b)(1) or 
    (b)(2)) or exempt purpose expenditures (as defined in paragraph 
    (1)), amounts properly chargeable to capital account shall not be 
    taken into account. There shall be taken into account a reasonable 
    allowance for exhaustion, wear and tear, obsolescence, or 
    amortization. Such allowance shall be computed only on the basis of 
    the straight-line method of depreciation. For purposes of this 
    section, a determination of whether an amount is properly chargeable 
    to capital account shall be made on the basis of the principles that 
    apply under subtitle A to amounts which are paid or incurred in a 
    trade or business.

(f) Affiliated organizations

                           (1) In general

        Except as otherwise provided in paragraph (4), if for a taxable 
    year two or more organizations described in section 501(c)(3) are 
    members of an affiliated group of organizations as defined in 
    paragraph (2), and an election under section 501(h) is effective for 
    at least one such organization for such year, then--
            (A) the determination as to whether excess lobbying 
        expenditures have been made and the determination as to whether 
        the expenditure limits of section 501(h)(1) have been exceeded 
        shall be made as though such affiliated group is one 
        organization,
            (B) if such group has excess lobbying expenditures, each 
        such organization as to which an election under section 501(h) 
        is effective for such year shall be treated as an organization 
        which has excess lobbying expenditures in an amount which equals 
        such organization's proportionate share of such group's excess 
        lobbying expenditures,
            (C) if the expenditure limits of section 501(h)(1) are 
        exceeded, each such organization as to which an election under 
        section 501(h) is effective for such year shall be treated as an 
        organization which is not described in section 501(c)(3) by 
        reason of the application of 501(h), and
            (D) subparagraphs (C) and (D) of subsection (d)(2), 
        paragraph (3) or subsection (d), and clause (i) of subsection 
        (e)(1)(C) shall be applied as if such affiliated group were one 
        organization.

                    (2) Definition of affiliation

        For purposes of paragraph (1), two organizations are members of 
    an affiliated group of organizations but only if--
            (A) the governing instrument of one such organization 
        requires it to be bound by decisions of the other organization 
        on legislative issues, or
            (B) the governing board of one such organization includes 
        persons who--
                (i) are specifically designated representatives of 
            another such organization or are members of the governing 
            board, officers, or paid executive staff members of such 
            other organization, and
                (ii) by aggregating their votes, have sufficient voting 
            power to cause or prevent action on legislative issues by 
            the first such organization.

                     (3) Different taxable years

        If members of an affiliated group of organizations have 
    different taxable years, their expenditures shall be computed for 
    purposes of this section in a manner to be prescribed by regulations 
    promulgated by the Secretary.

                         (4) Limited control

        If two or more organizations are members of an affiliated group 
    of organizations (as defined in paragraph (2) without regard to 
    subparagraph (B) thereof), no two members of such affiliated group 
    are affiliated (as defined in paragraph (2) without regard to 
    subparagraph (A) thereof), and the governing instrument of no such 
    organization requires it to be bound by decisions of any of the 
    other such organizations on legislative issues other than as to 
    action with respect to Acts, bills, resolutions, or similar items by 
    the Congress, then--
            (A) in the case of any organization whose decisions bind one 
        or more members of such affiliated group, directly or 
        indirectly, the determination as to whether such organization 
        has paid or incurred excess lobbying expenditures and the 
        determination as to whether such organization has exceeded the 
        expenditure limits of section 501(h)(1) shall be made as though 
        such organization has paid or incurred those amounts paid or 
        incurred by such members of such affiliated group to influence 
        legislation with respect to Acts, bills, resolutions, or similar 
        items by the Congress, and
            (B) in the case of any organization to which subparagraph 
        (A) does not apply, but which is a member of such affiliated 
        group, the determination as to whether such organization has 
        paid or incurred excess lobbying expenditures and the 
        determination as to whether such organization has exceeded the 
        expenditure limits of section 501(h)(1) shall be made as though 
        such organization is not a member of such affiliated group.

(Added Pub. L. 94-455, title XIII, Sec. 1307(b), Oct. 4, 1976, 90 Stat. 
1723; amended Pub. L. 95-600, title VII, Sec. 703(g)(1), Nov. 6, 1978, 
92 Stat. 2940.)


                               Amendments

    1978--Subsec. (c)(2). Pub. L. 95-600 substituted ``exempt purpose 
expenditures'' for ``proposed expenditures'' in heading of table.


                    Effective Date of 1978 Amendment

    Amendment by Pub. L. 95-600 effective Oct. 4, 1976, see section 
703(r) of Pub. L. 95-600, set out as a note under section 46 of this 
title.

                  Section Referred to in Other Sections

    This section is referred to in sections 162, 501, 6033, 9907 of this 
title; title 2 section 1610; title 7 section 4809.
