New Tax Law Affects Lobbying Expenses

WASHINGTON - The Internal Revenue Service issued guidance today concerning dues received by certain tax-exempt organizations that make lobbying and political expenditures. Generally, either a tax may be imposed on these organizations, or members may no longer deduct part of the dues paid.

Recently passed tax law now requires these tax-exempt organizations to send notices to members specifying the portion of the dues that is allocable to certain lobbying and political expenditures made after 1993. Members are not allowed business expense deductions for this portion of the dues. Generally, if the notice does not specify an amount allocable to lobbying or political expenditures, members may take a full deduction for the dues, but the exempt organization may be liable for tax.

A tax may be imposed on a tax-exempt organization if it does not send the notice, or if its notice underestimates the portion of the dues allocable to lobbying and political expenditures made after 1993. Relief from the tax is provided in certain circumstances.

These rules do not apply to tax-exempt organizations described in Internal Revenue Code section 501(c)(3).

Notice 93-55, relating to these rules will appear in Internal Revenue Bulletin 1993-35, dated November 8, 1993.

Previous | Next

1993 IRS News Releases | News Releases Main | Home