[EL] IRS discussion of nonpartisan analysis, study or research
Mark Schmitt
schmitt.mark at gmail.com
Mon Apr 23 20:05:02 PDT 2012
Barnaby writes: "the question can easily be disposed of by examining the
elements of lobbying: specific legislation, a view on the legislation,
and a call to action. Dropping one removes the activity from lobbying."
This is not the case. The "call to action" safe harbor applies /only/ to
grassroots lobbying//(e.g., "call your congressman...")/, /and the
distinction between grassroots and direct applies only to organizations
that take the 501(h) election and acknowledge lobbying. For direct
communications with legislators, expressing a view on legislation is
sufficient to constitute lobbying. In the case of ALEC, choosing to put
forward some legislation and not others would constitute expressing a
view. But by claiming to do no substantial lobbying at all, ALEC is
making itself subject to the vaguer, minimalist, "substantial part
test," which is what applies to private foundations. Generally private
foundations are advised that they can't do any lobbying at all, direct
or indirect, including expressing views on legislation without a call to
action.
I don't understand at all why ALEC's lawyers wouldn't insist that they
take the 501(h) election. Judging by their budget, they would have more
than half a million dollars to allocate to lobbying, and they could
easily put most of their costs of organizing meetings, etc., under the
exempt-purpose side and treat only the most specific costs of publishing
and distributing legislation as lobbying. Every liberal or mainstream
non-profit that might ever encounter a legislator is encouraged to take
the election. The Alliance for Justice actively encourages it, so does
the Center for Lobbying in the Public Interest, and so does every
exempt-org lawyer I've ever met. I've been on a panel at Independent
Sector encouraging non-profits to take the election. All the lawyers
advise that there's no safety in claiming to do an "insubstantial"
amount of lobbying, as opposed to taking full advantage of the lobbying
that the law actually allows.
/Mark
p.s. -- I'm not an exempt-orgs lawyer, but my knowledge on this comes
from very thorough and frequent training when I worked for a foundation,
and also from being on the boards of some c(3)'s, including the Center
for Policy Alternatives, the now-defunct liberal/moderate counterpart to
ALEC, which did take the 501(h) election and did acknowledge and
allocate lobbying costs.
Mark Schmitt
Senior Fellow, The Roosevelt Institute <http://www.newdeal20.org>
202/246-2350
gchat or Skype: schmitt.mark
@mschmitt9 <https://twitter.com/#%21/mschmitt9>
On 4/23/2012 12:03 PM, Ellen Aprill wrote:
> As often, I both agree and disagree with Barnaby. Looking at the CPE
> text is a fine recommendation. However, I don't agree with his
> definition of lobbying for these purposes. The definition he gives is
> that for section 501(c)(3) making an available election to limit
> lobbying expenses to a particular dollar amount on a sliding scale
> tied to the organization's the budget. As others have noted on this
> list (see a recent email from John Pomeranz), the IRS does not use the
> same definition of lobbying for non-electing organizations.
>
> The regulations for organizations that do make this election contain a
> definition of nonpartisan analysis, study or research that might be
> useful, although not directly applicable, and I attach them. For
> those organizations that make the election, lobbying does not include
> "/making available/ the result of nonpartisan analysis, study or
> research (emphasis added), so the regs go into detail as to what it
> means to make available, including subsequent use of a study in a
> lobbying effort.
>
> I am still trying to sort out in my mind what it means for the
> lobbying rules when a legislator in that role is a member of an
> organization. If an organization that had no legislators as members
> drafted model legislation and then went to legislators urging them to
> adopt the model, the action would clearly be lobbying. It bothers me
> if it is possible to avoid lobbying by making the legislator a member
> of the group. I have asked myself whether having legislators as
> members is analogous to a section 501(c)(3) testifying on legislation
> in response to a written invitation - another category that is
> considered "not lobbying." My tentative conclusion is not -
> individual legislators are not the same as a committee or
> subcommittee conducting a hearing and joining a group is not an
> invitation to ask for testimony.
>
> Let me state again that NCSL itself is a 501(c)(4) entity or any kind
> of 501(c). It is a governmental affiliate. There is no lobbying
> restriction on such an organization. (Such is not the case for its
> foundation, which is a 501(c)(3)). Also, for future reference,
> Guidestar includes 990's of (c)(4)'s and other 501(c)'s. Its database
> is not limited to the 990s of 501(c)(3)s.
>
> For those who might be interested, I also attach a table I have done
> of various types of government affiliates (including those that choose
> to qualify as 501(c)(3) organizations), their reporting requirements,
> requirements for the various categories, etc.
>
> Ellen
>
>
> On Mon, Apr 23, 2012 at 7:17 AM, <BZall at aol.com
> <mailto:BZall at aol.com>> wrote:
>
> Actually, for a more complete discussion of this point, perhaps
> the IRS's own Continuing Professional Education material might be
> edifying: http://www.irs.gov/pub/irs-tege/eotopicp97.pdf, see pp.
> 302, 274-76. The entire CPE chapter, in Q&A format by the
> still-active Judy Kindell and the sainted Jack Reilly, is quite
> specific and clear about lobbying by electing and non-electing
> 501(c)(3)s. A little dated now, but nothing significant has
> changed in this area since.
> But, like all discussions of lobbying, the question can easily be
> disposed of by examining the elements of lobbying: specific
> legislation, a view on the legislation, and a call to
> action. Dropping one removes the activity from lobbying. To have
> nonpartisan analysis, you need only drop the call to action. Which
> is what the organization described in Rev.Rul. 70-79 did: "Rev.
> Rul. 70-79 holds that the organization qualifies for IRC 501(c)(3)
> status because of the educational nature of its activities and
> because it abstained from advocating the adoption of any
> legislation or legislative action to implement its findings."
> Kindell & Reilly, supra, P. 275. The more modern view actually
> divides potential calls to action into direct and indirect, and
> only direct encouragement converts a nonpartisan analysis into
> lobbying. Id., P. 302-3.
> Now looking at the question about the organization, there's a very
> good argument that the organization DOES, in fact, engage in
> lobbying. From the website:
> "Our consulting services on policy issues go beyond testifying. We
> help draft bills, organize workshops, and convene
> legislative-executive teams. ... [S]taff are prepared to come to
> your state to work with legislators and staff on almost any public
> policy issue, or issue related to the management of a legislature.
> Contact your state's liaison to schedule a briefing or to learn
> more about this service." http://www.ncsl.org/issues-research.aspx
> And it lists several lobbying communications on its site.
> http://www.ncsl.org/state-federal-committees.aspx?tabs=854,48,684.
> We can't check its 990 though, because Guidestar doesn't have it
> (probably because it's a 501(c)(4)) and the organization doesn't
> make any financial information available on its website.
> If you dig deep into its website, though, it does have a 501(c)(3)
> foundation, http://www.ncsl.org/about-us.aspx?tabs=1027,82,570,
> which also seems to lobby quite openly: "As a supporter you will
> share and access information by:
>
> * Making your viewpoints on state policies available to
> legislators in all the states, commonwealths and territories,
> through NCSL committees and the NCSLnet."
>
> That's not an absolute indicator, however, since those
> "viewpoints" may not include the call to action discussed above.
> The foundation's 990 answers "no" to Part IV, Q. 4, about engaging
> in lobbying. If I were the New York Times, though, I'd probably
> classify it as lobbying. It's the intertwining of the c4 and the
> c3 that taints the chance of the c3 saying that it's not lobbying.
> See above; if you can affect the c4's lobbying through the c3, is
> there really a difference? See subsequent use, Kindell & Reilly,
> pp. 303-04. Since the foundation seems only to be an adjunct of
> the c4's lobbying activities, it might meet the primary purpose
> and subsequent use tests. So, I'd probably say that, yes, I have
> an opinion about NCSL's lobbying.
> Oh . . . wait . . . .
> um. . . . Sorry.
> You were asking about ALEC, not NCSL. Ah, well, as for its
> website, ALEC says: "ALEC serves solely as a resource for its
> members; it does not lobby state legislatures. . . . . ALEC does
> not lobby in any state."
> http://www.alec.org/about-alec/frequently-asked-questions/ The
> ALEC resolutions page offers model resolutions to be adopted, but
> as shown above, that, in itself, is not lobbying. Nothing in the
> NYT piece talks about the organization directly lobbying, or
> enticing the grassroots to do so. Nothing on the ALEC 990 shows
> lobbying, and the organization answered "no" to Part IV, Q. IV. I
> don't have any other information about them and their activities.
> But, of course, I COULD look to those who have both knowledge and
> information. I guess Alan Dye, who's as good an exempt
> organization lawyer as anyone,
> http://www.wc-b.com/bios.php?action=view&id=2
> <http://www.wc-b.com/bios.php?action=view&id=2>, might have a
> point. And CPA Tom Raffa, who handles quite a few 990s, might also
> know what lobbying means. So, just based on their certifications
> and statements, and not knowing what secret documents Common Cause
> fed to the NYT, I'd say that I also have an opinion on whether
> ALEC is lobbying and it's based as much on respect for those who
> do know and understand the rules, have access to the actual
> records and activities of the organization, and counsel those who
> must swear under penalty of perjury, as on the unsupported claims
> of an opposing advocacy organization. Opinions can differ, of
> course, but confirmation bias (on these grounds) raises its ugly
> head on me, too, I guess, not just on Common Cause and the NYT.
> Barnaby Zall
> Of Counsel
> Weinberg, Jacobs & Tolani, LLP
> Please note our new address:
> 10411 Motor City Dr., Suite 500
> Bethesda, MD 20817
> 301-231-6943 <tel:301-231-6943> (direct dial)
> www.wjlaw.com <http://www.wj/>
> bzall at aol.com <mailto:bzall at aol.com>
>
>
>
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> In a message dated 4/23/2012 12:02:45 A.M. Eastern Daylight Time,
> rhasen at law.uci.edu <mailto:rhasen at law.uci.edu> writes:
>
> Does anyone have an opinion on whether, under the IRS ruling,
> ALEC would fit into the category as the group's spokesperson
> claimed?
>
>
> On 4/22/2012 1:49 PM, Ellen Aprill wrote:
>> In light of the article in today's NYT on ALEC, I thought the
>> attached IRS ruling discussing the meaning of nonpartisan
>> analysis, study or research might be of interest to some on
>> the listserv.
>>
>> Ellen
>>
>> --
>> Ellen P. Aprill
>> John E. Anderson Professor of Tax Law
>> Loyola Law School
>> 919 Albany Street
>> Los Angeles, CA 90015
>> 213-736-1157 <tel:213-736-1157>
>>
>>
>>
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> --
> Rick Hasen
> Chancellor's Professor of Law and Political Science
> UC Irvine School of Law
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> http://electionlawblog.org <http://electionlawblog.org/>
>
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> --
> Ellen P. Aprill
> John E. Anderson Professor of Tax Law
> Loyola Law School
> 919 Albany Street
> Los Angeles, CA 90015
> 213-736-1157 <tel:213-736-1157>
>
>
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