[EL] Treatment of independent political expenditures on a company's financial books

[Trevor Potter]

Just because a corporation may constitutionally make particular expenditures, it does not follow that they are deductible as business expenses. I do not see why the Code can be challenged for making them non-deductible--just like as lobbying expenses, yachting expenses, and certain other expenses corporations may chose to incur.
Trevor Potter

________________________________

From: law-election-bounces at department-lists.uci.edu on behalf of Volokh, Eugene
Sent: Wed 9/28/2011 5:43 PM
To: law-election at uci.edu
Subject: [EL] Treatment of independent political expenditures on a company's financial books



               That may well be so, though I'm not sure that I would treat the deductibility of business expenses as a "subsidy."  My point, though, was just to suggest that there is already likely a longstanding practice with regard to this, given that corporations have long been able to speak out about ballot measures.  It seems to me the rule with regard to corporate speech about candidates ought to be the same.

 

Of course, now that I think of it, since in half the states corporations had been able to speak out about candidates even before Citizens United, there may have been a well-settled practice with regard to deductibility of those expenses as well.

 

Eugene

 

From: Fredric Woocher [mailto:fwoocher at strumwooch.com] 
Sent: Wednesday, September 28, 2011 2:30 PM
To: Volokh, Eugene; law-election at uci.edu
Subject: RE: [EL] Treatment of political contributions on a company's financial books

 

Constitutionally protected "speech," yes.  But wouldn't taking a tax deduction for these expenditures as a "business expense" make them taxpayer-subsidized?  I don't think the Constitution requires that.

 

Fredric D. Woocher

Strumwasser & Woocher LLP

10940 Wilshire Blvd., Ste. 2000

Los Angeles, CA 90024

fwoocher at strumwooch.com

(310) 576-1233

 

 

________________________________

From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Volokh, Eugene
Sent: Wednesday, September 28, 2011 10:07 AM
To: law-election at uci.edu
Subject: Re: [EL] Treatment of political contributions on a company's financial books

               I take it this refers largely to independent political expenditures, or to contributions to independent organizations that make such expenditures, since Citizens United did not strike down the ban on direct contributions to candidates.  And I would think such an independent expenditure supporting or opposing a candidate would be treated the same way as independent expenditures supporting or opposing ballot measures, which have long been seen as constitutionally protected, no?

 

               Eugene

 

From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Ellen Aprill
Sent: Wednesday, September 28, 2011 10:04 AM
To: law-election at uci.edu
Subject: [EL] Treatment of political contributions on a company's financial books

 

As has been discussed on this list, Section 162(e) makes these amounts nondeductible for tax purposes.  Especially now that Citizens United has held that corporations can make political contributions and in light of the Super-Pacs, I was hoping that someone on the list knows how auditors treat these amounts for purposes of financial reporting. 


Thanks.

 

   Ellen
-- 

Ellen P. Aprill

John E. Anderson Professor of Tax Law

Loyola Law School

919 Albany Street

Los Angeles, CA 90015

213-736-1157

 


<- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ->
To ensure compliance with requirements imposed by the IRS, 
we inform you that, unless specifically indicated otherwise, 
any tax advice contained in this communication (including any 
attachments) was not intended or written to be used, and 
cannot be used, for the purpose of (i) avoiding tax-related 
penalties under the Internal Revenue Code, or (ii)  promoting, 
marketing, or recommending to another party any tax-related 
matter addressed herein. 
 
This message is for the use of the intended recipient only.  It is
from a law firm and may contain information that is privileged and
confidential.  If you are not the intended recipient any disclosure,
copying, future distribution, or use of this communication is
prohibited.  If you have received this communication in error, please
advise us by return e-mail, or if you have received this communication
by fax advise us by telephone and delete/destroy the document.