-CITE-
26 USC CHAPTER 41 - PUBLIC CHARITIES 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 41 - PUBLIC CHARITIES
-HEAD-
CHAPTER 41 - PUBLIC CHARITIES
-MISC1-
Sec.
4911. Tax on excess expenditures to influence legislation.
4912. Tax on disqualifying lobbying expenditures of certain
organizations.
AMENDMENTS
1987 - Pub. L. 100-203, title X, Sec. 10714(d), Dec. 22, 1987,
101 Stat. 1330-471, added item 4912.
PRIOR PROVISIONS
The provisions of a prior chapter 41, Interest Equalization Tax,
were set out as follows:
Subchapter A, Acquisitions of foreign stock and debt
obligations, comprising sections 4911 to 4920.
Subchapter B, Acquisition by commercial banks, comprising
section 4931.
Prior sections 4911 to 4922 and 4931 were repealed by Pub. L.
94-455, Sec. 1904(a)(21)(A), Oct. 4, 1976, 90 Stat. 1814, effective
with respect to acquisitions of stock and debt obligations made
after June 30, 1974. See section 1904(a)(21)(B), set out as an
Effective Date of Repeal of Prior Provisions note below.
The subject matter of the prior provisions is as follows:
Section 4911, added Pub. L. 88-563, Sec. 2(a), Sept. 2, 1964, 78
Stat. 809; amended Pub. L. 89-243, Secs. 2, 3(a)(1), (b), Oct. 9,
1965, 79 Stat. 954; Pub. L. 90-59, Secs. 2, 3(a), July 31, 1967, 81
Stat. 145; Pub. L. 91-50, Aug. 2, 1969, 83 Stat. 86; Pub. L. 91-65,
Sec. 2, Aug. 25, 1969, 83 Stat. 105; Pub. L. 91-128, Secs. 2, 3,
Nov. 26, 1969, 83 Stat. 261, 262; Pub. L. 92-9, Sec. 2, Apr. 1,
1971, 85 Stat. 13; Pub. L. 93-17, Sec. 2, Apr. 10, 1973, 87 Stat.
12, imposed a tax on each acquisition by a United States person of
stock of a foreign issuer or a debt obligation of a foreign
obligor, if such obligation had a period remaining to maturity of 1
year or more and provided for modification of tax rate by executive
order, rate tables, rates during interim period, rules and
regulations, persons liable for tax, and termination date, that no
tax shall be imposed on any acquisition made after June 30, 1974.
Section 4912, added Pub. L. 88-563, Sec. 2(a), Sept. 2, 1964, 78
Stat. 810; amended Pub. L. 89-243, Sec. 4(m)(3), Oct. 9, 1965, 79
Stat. 963; Pub. L. 90-59, Sec. 5(a)(1), July 31, 1967, 81 Stat.
157; Pub. L. 91-128, Sec. 4(a)(1), Nov. 26, 1969, 83 Stat. 263;
Pub. L. 92-9, Sec. 3(a)(1), Apr. 1, 1971, 85 Stat. 14; Pub. L.
93-17, Sec. 3(e), Apr. 10, 1973, 87 Stat. 17, defined term
"acquisition" and provided special rules to be applied to certain
transfers to foreign trusts, foreign corporations and partnerships,
foreign branches, acquisitions from domestic corporations or
partnerships formed or availed of to obtain funds for foreign
issuer or obligor, and reorganization exchanges.
Section 4913, added Pub. L. 88-563, Sec. 2(a), Sept. 12, 1964, 78
Stat. 812, imposed general and special limitations on tax on
certain acquisitions relating to stock or debt obligations acquired
by surrender, extensions, renewals, and exercises, transfers which
are deemed acquisitions and acquisitions by certain domestic
corporations and partnerships.
Section 4914, added Pub. L. 88-563, Sec. 2(a), Sept. 2, 1964, 78
Stat. 813; amended Pub. L. 89-44, title IV, Sec. 405(d), June 21,
1965, 79 Stat. 149; Pub. L. 89-243, Secs. 3(a)(2), (3),
4(a)(1)-(3), (b)-(f)(2), (g), (h)(1), Oct. 9, 1965, 79 Stat. 954,
956-960; Pub. L. 89-809, title II, Secs. 213(a), (b)(1), 214(a),
Nov. 13, 1966, 80 Stat. 1585; Pub. L. 90-59, Sec. 5(b)(1), (c)(1),
(2), (d)(1), (e)(1), (f)(1), July 31, 1967, 81 Stat. 157, 158; Pub.
L. 91-128, Sec. 4(b)(1), (c)(1), (2), (i)(1), (2), Nov. 26, 1969,
83 Stat. 263, 264, 268; Pub. L. 92-9, Sec. 3(b)(1), (2), (c)(1),
(d)(1), (2), Apr. 1, 1971, 85 Stat. 15-17; Pub. L. 93-17, Sec.
3(f), Apr. 10, 1973, 87 Stat. 17, provided exclusions for certain
acquisitions including: transactions not considered acquisitions;
export credit, etc., transactions; loans to assure raw materials
sources; acquisitions by insurance companies doing business in
foreign countries; acquisitions by certain tax-exempt organizations
such as labor, fraternal, and similar organizations having foreign
branches or chapters; sale or liquidation of foreign subsidiary or
sale of foreign branch; certain debt obligations secured by United
States mortgages, etc.; acquisitions of stock of foreign issuers
investing exclusively in the United States, and loss of entitlement
to exclusion in case of certain subsequent transfers or
acquisitions of stock or debt obligations in connection with
nationalization, expropriation, etc.
Section 4915, added Pub. L. 88-563, Sec. 2(a), Sept. 2, 1964, 78
Stat. 824; amended Pub. L. 90-59, Sec. 5(h)(3), July 31, 1967, 81
Stat. 163; Pub. L. 91-128, Sec. 4(e)(3), Nov. 26, 1969, 83 Stat.
267; Pub. L. 92-9, Sec. 3(e)(1), Apr. 1, 1971, 85 Stat. 17; Pub. L.
93-17, Sec. 3(g)(1), Apr. 10, 1973, 87 Stat. 18, related to
exclusions for direct investments and provided for excluded
acquisitions, overpayment with respect to certain taxable
acquisitions, special rule for government-controlled enterprises,
exception for foreign corporations or partnerships formed or
availed of for tax avoidance, exception for acquisitions made with
intent to sell to United States persons, and special rule for
investments in certain lending and financial corporations.
Section 4916, added Pub. L. 88-563, Sec. 2(a), Sept. 2, 1964, 78
Stat. 827; amended Pub. L. 89-243, Sec. 4(i), Oct 9, 1965, 79 Stat.
960; Pub. L. 90-59, Sec. 5(g)(1), July 31, 1967, 81 Stat. 159; Pub.
L. 92-9, Sec. 3(b)(3), Apr. 1, 1971, 85 Stat. 16; Pub. L. 93-17,
Sec. 3(b), Apr. 10, 1973, 87 Stat. 13, related to exclusion for
investment in less developed countries, provided special rules
applicable to such investments, subsequent tax liability in certain
cases, the repeal of exclusion for issues after Jan. 29, 1973, in
the case of less developed country shipping companies, and defined
term "less developed country".
Section 4917, added Pub. L. 88-563, Sec. 2(a), Sept. 2, 1964, 78
Stat. 830; amended Pub. L. 89-243, Sec. 4(j), (k), Oct. 9, 1965, 79
Stat. 960; Pub. L. 90-59, Sec. 5(h)(1), July 31, 1967, 81 Stat.
159, related to exclusion for original or new issues where required
for international monetary stability.
Section 4918, added Pub. L. 88-563, Sec. 2(a), Sept. 2, 1964, 78
Stat. 831; amended Pub. L. 89-809, title II, Sec. 213(b)(2), Nov.
13, 1966, 80 Stat. 1585; Pub. L. 90-59, Sec. 4(a), July 31, 1967,
81 Stat. 148; Pub. L. 90-73, Sec. 2(a)-(c), Aug. 29, 1967, 81 Stat.
175, 176; Pub. L. 93-17, Sec. 3(h)(1), Apr. 10, 1973, 87 Stat. 18,
related to exemption for prior American ownership and compliance,
proof of such ownership or compliance, issuance of IET clean
confirmation by participating firm, sales effected by participating
firms in connection with exempt acquisitions, filing of transition
inventory, transfer of custody certificate, certain debt
obligations arising out of loans to assure raw material sources,
regulations, and definitions of "participating firm," and
"participating custodian".
Section 4919, added Pub. L. 88-563, Sec. 2(a), Sept. 2, 1964, 78
Stat. 833; amended Pub. L. 89-243, Sec. 4(1), Oct. 9, 1965, 79
Stat. 961; Pub. L. 90-59, Sec. 5(i)(1), (2), July 31, 1967, 81
Stat. 159, 160; Pub. L. 91-128, Sec. 4(d)(1), Nov. 26, 1969, 83
Stat. 264; Pub. L. 92-9, Sec. 3(f)(1), (2), Apr. 1, 1971, 85 Stat.
20; Pub. L. 93-17, Sec. 3(i)(1), Apr. 10, 1973, 87 Stat. 19,
related to credit or refund on sales by underwriters and dealers to
foreign persons, evidence needed to support such credit or refund,
and defined terms "underwriter", "dealer", and "persons other than
United States persons".
Section 4920, added Pub. L. 88-563, Sec. 2(a), Sept. 2, 1964, 78
Stat. 835; amended Pub. L. 89-243, Secs. 3(a)(4), 4(m)(1), (2)(A),
(n), Oct. 9, 1965, 79 Stat. 954, 961-963; Pub. L. 90-59, Secs.
4(f), 5(j)-(k)(2), July 31, 1967, 81 Stat. 156, 160-163; Pub. L.
91-128, Sec. 4(e)(1), (2), (i)(3), Nov. 26, 1969, 83 Stat. 264,
269; Pub. L. 92-9, Sec. 3(e)(2), (3), (g)(1), (h)(1), Apr. 1, 1971,
85 Stat. 18, 20, 21; Pub. L. 93-17, Sec. 3(g)(2)(j), Apr. 10, 1973,
87 Stat. 18, 19, related to definitions and special rules.
Section 4921, added Pub. L. 92-9, Sec. 3(i)(1), Apr. 1, 1971, 85
Stat. 21, related to standby authority of the President to impose
tax on debt obligations of foreign obligors having a period
remaining to maturity of less than 1 year and provided that such
authority may be extended by Executive order.
Section 4922, added Pub. L. 93-17, Sec. 3(d)(1), Apr. 10, 1973,
87 Stat. 15, related to exclusion for certain issues to finance new
or additional direct investment in the United States, qualification
for exclusion, and loss of entitlement to exclusion by subsequent
noncompliance.
Section 4931, added Pub. L 88-563, Sec. 2(a), Sept. 2, 1964, 78
Stat. 839; amended Pub. L. 89-243, Secs. 3(e)(1), 4(a)(4), (o),
Oct. 9, 1965, 79 Stat. 955, 956, 964; Pub. L. 89-809, title II,
Sec. 215(a), Nov. 13, 1966, 80 Stat. 1587, Pub. L. 90-59, Sec.
3(b)(1), July 31, 1967, 81 Stat. 145, related to the standby
authority of the President to impose, by Executive order, tax on
acquisitions by commercial banks of debt obligations of foreign
obligors, made provision for exclusions concerning export loans,
foreign currency loans by foreign branches, preexisting
commitments, and provided for prescription of regulations by the
Secretary.
EFFECTIVE DATE OF REPEAL OF PRIOR PROVISIONS
Section 1904(a)(21)(B) of Pub. L. 94-455 provided that: "The
repeal made by subparagraph (A) [repealing sections 4911 through
4922 and section 4931 of this title] shall apply with respect to
acquisitions of stock and debt obligations made after June 30,
1974."
-SECREF-
CHAPTER REFERRED TO IN OTHER SECTIONS
This chapter is referred to in sections 275, 6104, 6161, 6211,
6213, 6214, 6405, 6501, 6512, 6862, 6871, 7422, 7871 of this title.
-End-
-CITE-
26 USC Sec. 4911 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 41 - PUBLIC CHARITIES
-HEAD-
Sec. 4911. Tax on excess expenditures to influence legislation
-STATUTE-
(a) Tax imposed
(1) In general
There is hereby imposed on the excess lobbying expenditures of
any organization to which this section applies a tax equal to 25
percent of the amount of the excess lobbying expenditures for the
taxable year.
(2) Organizations to which this section applies
This section applies to any organization with respect to which
an election under section 501(h) (relating to lobbying
expenditures by public charities) is in effect for the taxable
year.
(b) Excess lobbying expenditures
For purposes of this section, the term "excess lobbying
expenditures" means, for a taxable year, the greater of -
(1) the amount by which the lobbying expenditures made by the
organization during the taxable year exceed the lobbying
nontaxable amount for such organization for such taxable year, or
(2) the amount by which the grass roots expenditures made by
the organization during the taxable year exceed the grass roots
nontaxable amount for such organization for such taxable year.
(c) Definitions
For purposes of this section -
(1) Lobbying expenditures
The term "lobbying expenditures" means expenditures for the
purpose of influencing legislation (as defined in subsection
(d)).
(2) Lobbying nontaxable amount
The lobbying nontaxable amount for any organization for any
taxable year is the lesser of (A) $1,000,000 or (B) the amount
determined under the following table:
If the exempt purpose The lobbying nontaxable
expenditures are - amount is -
--------------------------------------------------------------------
Not over $500,000 20 percent of the exempt purpose
expenditures.
Over $500,000 but not over $100,000, plus 15 percent of the
$1,000,000 excess of the exempt purpose
expenditures over $500,000.
Over $1,000,000 but not over $175,000 plus 10 percent of the
$1,500,000 excess of the exempt purpose
expenditures over $1,000,000.
Over $1,500,000 $225,000 plus 5 percent of the
excess of the exempt purpose
expenditures over $1,500,000.
--------------------------------------------------------------------
(3) Grass roots expenditures
The term "grass roots expenditures" means expenditures for the
purpose of influencing legislation (as defined in subsection (d)
without regard to paragraph (1)(B) thereof).
(4) Grass roots nontaxable amount
The grass roots nontaxable amount for any organization for any
taxable year is 25 percent of the lobbying nontaxable amount
(determined under paragraph (2)) for such organization for such
taxable year.
(d) Influencing legislation
(1) General rule
Except as otherwise provided in paragraph (2), for purposes of
this section, the term "influencing legislation" means -
(A) any attempt to influence any legislation through an
attempt to affect the opinions of the general public or any
segment thereof, and
(B) any attempt to influence any legislation through
communication with any member or employee of a legislative
body, or with any government official or employee who may
participate in the formulation of the legislation.
(2) Exceptions
For purposes of this section, the term "influencing
legislation", with respect to an organization, does not include -
(A) making available the results of nonpartisan analysis,
study, or research;
(B) providing of technical advice or assistance (where such
advice would otherwise constitute the influencing of
legislation) to a governmental body or to a committee or other
subdivision thereof in response to a written request by such
body or subdivision, as the case may be;
(C) appearances before, or communications to, any legislative
body with respect to a possible decision of such body which
might affect the existence of the organization, its powers and
duties, tax-exempt status, or the deduction of contributions to
the organization;
(D) communications between the organization and its bona fide
members with respect to legislation or proposed legislation of
direct interest to the organization and such members, other
than communications described in paragraph (3); and
(E) any communication with a governmental official or
employee, other than -
(i) a communication with a member or employee of a
legislative body (where such communication would otherwise
constitute the influencing of legislation), or
(ii) a communication the principal purpose of which is to
influence legislation.
(3) Communications with members
(A) A communication between an organization and any bona fide
member of such organization to directly encourage such member to
communicate as provided in paragraph (1)(B) shall be treated as a
communication described in paragraph (1)(B).
(B) A communication between an organization and any bona fide
member of such organization to directly encourage such member to
urge persons other than members to communicate as provided in
either subparagraph (A) or subparagraph (B) of paragraph (1)
shall be treated as a communication described in paragraph
(1)(A).
(e) Other definitions and special rules
For purposes of this section -
(1) Exempt purpose expenditures
(A) In general
The term "exempt purpose expenditures" means, with respect to
any organization for any taxable year, the total of the amounts
paid or incurred by such organization to accomplish purposes
described in section 170(c)(2)(B) (relating to religious,
charitable, educational, etc., purposes).
(B) Certain amounts included
The term "exempt purpose expenditures" includes -
(i) administrative expenses paid or incurred for purposes
described in section 170(c)(2)(B), and
(ii) amounts paid or incurred for the purpose of
influencing legislation (whether or not for purposes
described in section 170(c)(2)(B)).
(C) Certain amounts excluded
The term "exempt purpose expenditures" does not include
amounts paid or incurred to or for -
(i) a separate fundraising unit of such organization, or
(ii) one or more other organizations, if such amounts are
paid or incurred primarily for fundraising.
(2) Legislation
The term "legislation" includes action with respect to Acts,
bills, resolutions, or similar items by the Congress, any State
legislature, any local council, or similar governing body, or by
the public in a referendum, initiative, constitutional amendment,
or similar procedure.
(3) Action
The term "action" is limited to the introduction, amendment,
enactment, defeat, or repeal of Acts, bills, resolutions, or
similar items.
(4) Depreciation, etc., treated as expenditures
In computing expenditures paid or incurred for the purpose of
influencing legislation (within the meaning of subsection (b)(1)
or (b)(2)) or exempt purpose expenditures (as defined in
paragraph (1)), amounts properly chargeable to capital account
shall not be taken into account. There shall be taken into
account a reasonable allowance for exhaustion, wear and tear,
obsolescence, or amortization. Such allowance shall be computed
only on the basis of the straight-line method of depreciation.
For purposes of this section, a determination of whether an
amount is properly chargeable to capital account shall be made on
the basis of the principles that apply under subtitle A to
amounts which are paid or incurred in a trade or business.
(f) Affiliated organizations
(1) In general
Except as otherwise provided in paragraph (4), if for a taxable
year two or more organizations described in section 501(c)(3) are
members of an affiliated group of organizations as defined in
paragraph (2), and an election under section 501(h) is effective
for at least one such organization for such year, then -
(A) the determination as to whether excess lobbying
expenditures have been made and the determination as to whether
the expenditure limits of section 501(h)(1) have been exceeded
shall be made as though such affiliated group is one
organization,
(B) if such group has excess lobbying expenditures, each such
organization as to which an election under section 501(h) is
effective for such year shall be treated as an organization
which has excess lobbying expenditures in an amount which
equals such organization's proportionate share of such group's
excess lobbying expenditures,
(C) if the expenditure limits of section 501(h)(1) are
exceeded, each such organization as to which an election under
section 501(h) is effective for such year shall be treated as
an organization which is not described in section 501(c)(3) by
reason of the application of 501(h), and
(D) subparagraphs (C) and (D) of subsection (d)(2), paragraph
(3) or subsection (d), and clause (i) of subsection (e)(1)(C)
shall be applied as if such affiliated group were one
organization.
(2) Definition of affiliation
For purposes of paragraph (1), two organizations are members of
an affiliated group of organizations but only if -
(A) the governing instrument of one such organization
requires it to be bound by decisions of the other organization
on legislative issues, or
(B) the governing board of one such organization includes
persons who -
(i) are specifically designated representatives of another
such organization or are members of the governing board,
officers, or paid executive staff members of such other
organization, and
(ii) by aggregating their votes, have sufficient voting
power to cause or prevent action on legislative issues by the
first such organization.
(3) Different taxable years
If members of an affiliated group of organizations have
different taxable years, their expenditures shall be computed for
purposes of this section in a manner to be prescribed by
regulations promulgated by the Secretary.
(4) Limited control
If two or more organizations are members of an affiliated group
of organizations (as defined in paragraph (2) without regard to
subparagraph (B) thereof), no two members of such affiliated
group are affiliated (as defined in paragraph (2) without regard
to subparagraph (A) thereof), and the governing instrument of no
such organization requires it to be bound by decisions of any of
the other such organizations on legislative issues other than as
to action with respect to Acts, bills, resolutions, or similar
items by the Congress, then -
(A) in the case of any organization whose decisions bind one
or more members of such affiliated group, directly or
indirectly, the determination as to whether such organization
has paid or incurred excess lobbying expenditures and the
determination as to whether such organization has exceeded the
expenditure limits of section 501(h)(1) shall be made as though
such organization has paid or incurred those amounts paid or
incurred by such members of such affiliated group to influence
legislation with respect to Acts, bills, resolutions, or
similar items by the Congress, and
(B) in the case of any organization to which subparagraph (A)
does not apply, but which is a member of such affiliated group,
the determination as to whether such organization has paid or
incurred excess lobbying expenditures and the determination as
to whether such organization has exceeded the expenditure
limits of section 501(h)(1) shall be made as though such
organization is not a member of such affiliated group.
-SOURCE-
(Added Pub. L. 94-455, title XIII, Sec. 1307(b), Oct. 4, 1976, 90
Stat. 1723; amended Pub. L. 95-600, title VII, Sec. 703(g)(1), Nov.
6, 1978, 92 Stat. 2940.)
-MISC1-
AMENDMENTS
1978 - Subsec. (c)(2). Pub. L. 95-600 substituted "exempt purpose
expenditures" for "proposed expenditures" in heading of table.
EFFECTIVE DATE OF 1978 AMENDMENT
Amendment by Pub. L. 95-600 effective Oct. 4, 1976, see section
703(r) of Pub. L. 95-600, set out as a note under section 46 of
this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 162, 501, 6033, 9907 of
this title; title 2 section 1610; title 7 section 4809.
-End-
-CITE-
26 USC Sec. 4912 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 41 - PUBLIC CHARITIES
-HEAD-
Sec. 4912. Tax on disqualifying lobbying expenditures of certain
organizations
-STATUTE-
(a) Tax on organization
If an organization to which this section applies is not described
in section 501(c)(3) for any taxable year by reason of making
lobbying expenditures, there is hereby imposed a tax on the
lobbying expenditures of such organization for such taxable year
equal to 5 percent of the amount of such expenditures. The tax
imposed by this subsection shall be paid by the organization.
(b) On management
If tax is imposed under subsection (a) on the lobbying
expenditures of any organization, there is hereby imposed on the
agreement of any organization manager to the making of any such
expenditures, knowing that such expenditures are likely to result
in the organization not being described in section 501(c)(3), a tax
equal to 5 percent of the amount of such expenditures, unless such
agreement is not willful and is due to reasonable cause. The tax
imposed by this subsection shall be paid by any manager who agreed
to the making of the expenditures.
(c) Organizations to which section applies
(1) In general
Except as provided in paragraph (2), this section shall apply
to any organization which was exempt (or was determined by the
Secretary to be exempt) from taxation under section 501(a) by
reason of being an organization described in section 501(c)(3).
(2) Exceptions
This section shall not apply to any organization -
(A) to which an election under section 501(h) applies,
(B) which is a disqualified organization (within the meaning
of section 501(h)(5)), or
(C) which is a private foundation.
(d) Definitions
(1) Lobbying expenditures
The term "lobbying expenditure" means any amount paid or
incurred by the organization in carrying on propaganda, or
otherwise attempting to influence legislation.
(2) Organization manager
The term "organization manager" has the meaning given to such
term by section 4955(f)(2).
(3) Joint and several liability
If more than 1 person is liable under subsection (b), all such
persons shall be jointly and severally liable under such
subsection.
-SOURCE-
(Added Pub. L. 100-203, title X, Sec. 10714(a), Dec. 22, 1987, 101
Stat. 1330-470.)
-MISC1-
EFFECTIVE DATE
Section 10714(e) of Pub. L. 100-203 provided that: "The
amendments made by this section [enacting this section and amending
sections 6501 and 7454 of this title] shall apply to taxable years
beginning after the date of the enactment of this Act [Dec. 22,
1987]."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 6033, 6501, 6511, 7454 of
this title.
-End-
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