[EL] Criticism of candidate by 501(c)((3) during campaign -- permitted?

[John Pomeranz]

Available evidence suggests that the IRS is auditing fewer tax-exempt organizations, whether for excessive 501(c)(3) lobbying or other matters. To the degree this is a problem of lack of resources, it's hard to imagine that the recent scandal is going to lead Congress to make more resources available to the IRS soon. 

A note on your summary of the the 501(c)(3) lobbying rules, however:  Under the expenditure-based limits you're talking about (the 501(h) test), overall lobbying is limited to no more than 20% of a 501(c)(3)'s budget, and larger 501(c)(3)'s limits are even tighter.   501(c)(3)s may spend no more than a quarter of that overall limit on grassroots lobbying, but mere public comments on legislative policy issues usually don't count as grassroots lobbying absent a "call to action" that explicitly or implicitly urges the communication's recipients to contact policymakers. A 501(c)(3) that exceeds its lobbying limit in a single year must pay a penalty tax, but only jeopardizes its tax-exempt status if its lobbying in the most recent four years exceeds its lobbying limit by more than 50%. 



John Pomeranz 
Harmon, Curran, Spielberg & Eisenberg

On Jun 10, 2013, at 8:13 AM, "Marc Greidinger" <mpoweru4 at verizon.net> wrote:

> Related: I look at the Form 990s for 501(c)(3)s and see this 25% limit for
> expenditures on grassroots lobbying per annum, and also on average over 5
> years. Yet I routinely see organizations whose effective primary activities
> are lobbying and advocacy file tax returns that claim that they are always
> well within that limit. 
> 
> A packet of press clippings from some of these organization would show the
> volunteer and paid leadership routinely comments on behalf of the
> organizations on elected officials, their statements, and the positions they
> take and often in vociferous terms if there is a perceived deviation from
> the positions and doctrine of the organizations. If the elected officials'
> statements occur during the course of a campaign, the organizations'
> spokesmen's response would regularly appear in campaign coverage.
> 
> How likely is an audit -- especially with the IRS in its hobbled condition
> vis-à-vis c4s?
> 
> Marc Greidinger
> Attorney at Law
> Legal Works of Marc Greidinger - Maryland
> (703) 626-1363
> 
>