Posts Tagged ‘501(c)4’

New Regulations to Shake Up Nonprofit Advocacy

Monday, December 9th, 2013 by Geoffrey Lyons

IT HAS BEEN over half a century since restrictions on tax-exempt 501(c)4 organizations – defined broadly as civic leagues and groups whose primary function is to “promote social welfare” – were spelled out in detail. It was then, in 1959, that the IRS modified “social welfare” to exclude “direct or indirect participation or intervention in political campaigns.”  Since modern (c)4’s must play by the rules lest they relinquish their tax free privileges, it seems on the face of it that they would avoid meddling in politics.

But everyone knows this isn’t the case. Crossroads GPS, the (c)4 arm of Karl Rove’s American Crossroads, is a case in point. The conservative advocacy group spent over $213,000 on federal elections last year. How, one might ask, is that permissible? Check the fine print: According to the IRS, “an organization that primarily engages in activities that promote social welfare will be considered under the current regulations to be operating exclusively for the promotion of social welfare.” It’s easy to engage “exclusively” in something when the meaning of the word is watered down beyond recognition. According to the Washington Post, tax lawyers have taken all of this to mean that (c)4’s can keep their tax status as long as they spend at least 51 percent of their resources on social welfare.

Now, nearly 55 years since the issue was last dealt with in depth, the IRS is proposing clearer boundaries for political activities that should not be considered social welfare. An outline released just two weeks ago proposing the rules changes is considered by most experts to be a significant first step, signalling what’s likely to result in drastic revisions to current practice. Still, some are skeptical about the potential outcome, claiming that so-called “dark money” will simply filter out of (c)4’s and into other 501(c)s, such as (c)6’s. Others, mostly on the right, call the proposal a political move, the latest in an “unfortunate pattern” that began with the IRS’s targeting of conservative grassroots advocacy groups.  Whichever one’s take on the matter, (c)4’s are inevitably in for the makeover of a lifetime.

Nonprofit Political Structure Audioconference

Wednesday, August 18th, 2010 by Brittany

Register today!

Each of these action-oriented audioconferences takes just 90-minutes out of your day – yet they provide you with expert guidance that will make a bottom-line difference to your ongoing success with everything from lobbying and grassroots activities, to member involvement and political contributions.

SESSION 1: 501(c)3 organizations: keeping your tax-exempt status intact
September 14, 2010 · 2:00 – 3:30 pm EST

501(c)3 organizations must not engage in political activities, such as attempts to influence elections. But do you know exactly what that means? It could cost you big time if you don’t fully comply with IRS rules to avoid direct advocacy. Your organization can lobby – but only to some extent.  This session focuses on rules and regulations for 501(c)3 organizations – tax structure, advocacy, political events, and other political activities.  In addition, you’ll learn how to conduct a self-audit that provides vital early-warning on any areas of your operation that do not currently comply with IRS, FEC or HLOGA requirements.

SESSION 2: 501(c)4 & (c)6 organizations: how can you advocate?
September 21, 2010 · 2:00-3:30 pm EST

This session examines the special issues compliance issues surrounding nonprofits’ political activities, including the IRS rules that must be obeyed to maintain tax-exempt status and the HLOGA requirements that must be met to avoid disastrous publicity, $200,000 fines and up to five years in jail. Also included: a discussion of appropriate direct political activity.

Click here to register for one or both of the sessions!