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Applying for Exemption/Misc. Determination: Sample Questions

 

Attempting to Influence Legislation or 
Political Campaign Intervention Activities

Applications for exemption and miscellaneous determination requests are assigned to Exempt Organizations specialists for review. If additional information is necessary to make a determination, a specialist will contact the organization for the information. Here’s a list of questions that might be asked on this topic.

Specific Questions for Form 1023, 501(c)(3) Organizations (1 through 4)

1: General question  

2-4: Attempting to influence legislation

[Instruction: Ask question 1 if it appears based on the facts and circumstances that a 
Section 501(c)(3) applicant is better described as a Section 501(c)(4) organization.]

1. Although you are applying for recognition as an organization described in Internal Revenue Code Section 501(c)(3), based on the information submitted, it appears that you more closely resemble a social welfare organization under Section 501(c)(4). To be tax-exempt under Section 501(c)(3), an organization must be organized and operated exclusively for exempt purposes set forth in Section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not attempt to influence legislation as a substantial part of its activities, and it may not participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office. On the other hand, a Section 501(c)(4) social welfare organization may spend 100% of its time attempting to influence legislation (so long as it is germane to the organization’s social welfare purposes) and may engage in some political campaign intervention. A Section 501(c)(4) social welfare organization is also a tax-exempt organization; however, contributions are not tax-deductible.

a. State whether or not you would like us to consider you as an organization described 
   under Section 501(c)(4) as a social welfare organization rather than as a 
   Section 501(c)(3) organization.

b. If you do want us to consider you as an organization described under Section 501(c)(4), 
    rather than a Section 501(c)(3) organization, submit a completed Form 1024, 
    Application for Recognition of Exemption Under Section 501(a), which is available 
    on the IRS website at www.irs.gov/Forms-&-Pubs, Forms & Publications. You do not 
    need to pay a new user fee.

[Instruction: 2 is applicable if a Section 501(c)(3) applicant indicated on Part VIII, line 2a of the Form 1023 that it will attempt to influence legislation, checked no to line 2b that it was making an election by filing Form 5768, and did not submit additional information as requested by the Form 1023.]

2. On Part VIII, line 2a of your Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, you stated you would attempt to influence legislation. You checked no to Part VIII, line 2b of the Form 1023 but did not describe whether your attempts to influence legislation are a substantial part of your activities, including the time and money spent on your attempts to influence legislation as compared to your total activities. Please describe your attempts to influence legislation in detail and state the percentage of your total expenditures and total time spent on these activities during each of your past taxable years and an estimate of your total expenditures and total time you intend to spend on these activities in the future. For purposes of calculating the percentage of expenditures, allocate salaries, administrative, overhead, and other general expenditures to these activities using a reasonable method.

For purposes of calculating the percentage of time, include volunteer as well as employee hours.  

For purposes of this question, you are attempting to influence legislation if you contact, or urge the public to contact, members of a legislative body for the purpose of proposing, supporting, or opposing legislation. For these purposes, the term “legislation” includes action by Congress, a state legislature, a local council, or a similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive offices) or by the public in referendums, ballot initiatives, constitutional amendments, or similar procedure.  

[Instruction: 3 is applicable if the facts and circumstances indicate that the applicant attempts to influence legislation but it checked no to Part VIII, line 2a.]  

3. It appears you [insert description of activities set forth in the application indicating attempts to influence legislation and enclose any supporting materials that have not been submitted by applicant.] This activity appears to influence legislation, however you checked no to Part VIII, line 2a on your Form 1023. Provide the following information:

a. Describe these activities in greater detail, including the percentage of your total 
    expenditures and total time spent on these activities during each of your past taxable 
    years and an estimate of your total expenditures and total time you intend to spend on 
    these activities in the future. For purposes of calculating the percentage of expenditures, 
    allocate salaries, administrative, overhead, and other general expenditures to these 
    activities using a reasonable method. For purposes of calculating the percentage of time, 
    include volunteer as well as employee hours.

b. Submit [representative] copies of the materials you prepare or distribute in furtherance 
    of these activities.  

[Instruction: 4 is applicable if the facts and circumstances indicate that the applicant may be an “action” organization whose purposes can only be attained by legislation (as defined in Treas. Reg. Section 1.501(c)(3)-1(c)(3)(iv)).]

4. Your primary activity is [insert language from application]. It appears your purposes can only be attained by legislation or the defeat of proposed legislation. Explain whether there are other means for accomplishing your purposes and if so, describe your activities in doing so.  

Potential Political Campaign Intervention Activities (Form 1023 or Form 1024) (5 through 18)

[Instruction: If an organization has submitted Form 1024, only ask questions in 5 through 18 if the activity at issue in the question (either alone or together with other activities) could potentially result in the organization not being primarily engaged in activities that further its exempt purpose.]  

5-7: General questions  

8-10: Communications, and research and surveys

11-12: Candidate forums and candidate appearances

13-14: Voter registration, get out the vote drives, and voter guides

15-16: Private benefit to a particular political party or inurement and/or private benefit to a candidate

17: Affiliated organizations

18: Grant making to other organizations

[Instruction: Ask 5 only if a Section 501(c)(3) applicant stated on its Form 1023 that it engages in political campaign intervention activities but did not describe those activities as required by the Form.]

5. You stated on Part VIII, line 1 of your Form 1023 that you support or oppose candidates in political campaigns, but you did not submit an explanation as required by the form. Submit a detailed explanation of your activities that support or oppose candidates in political campaigns.  

[Instruction: Ask 6 only if an applicant stated on its Form 1024 that it engages in political campaign intervention activities but did not describe those activities as required by the Form.]  

6. You stated on Part II, line 15 of your Form 1024 that you spent or will spend money attempting to influence the selection, nomination, election, or appointment of any person to any federal, state, or local public office or to an office in a political organization. However, you did not submit a [detailed explanation of this activity and/or a list of the amounts to be spent] as required on the form. Please describe these activities in detail and state the percentage of your total expenditures and total time spent on these activities during each of your past taxable years and an estimate of your total expenditures and total time you intend to spend on these activities in the future. For purposes of calculating the percentage of expenditures, allocate salaries, administrative, overhead, fundraising, and other general expenditures to these activities using a reasonable method. For purposes of calculating the percentage of time, include volunteer as well as employee hours.  

[Instruction: Ask 7 only if an applicant did not state on its Form 1023 or Form 1024 that it engages in political campaign intervention activities, but the facts and circumstances indicate that there may be an activity that does constitute political campaign intervention and there is not a category listed in this template that the activity would otherwise fall into.]  

7. You engage in [insert description of activities and enclose any supporting materials that have not been submitted by applicant]. It appears this may constitute political campaign intervention. 

a. Describe the activities in greater detail.

b. State the percentage of your total expenditures and total spent on these activities in 
    each of your past taxable years. Additionally, estimate the percentage of your total 
    time and total funds you plan to spend on these activities in the future. For purposes 
    of calculating the percentage of expenditures, allocate salaries, administrative, 
    overhead, fundraising, and other general expenditures to these activities using 
    a reasonable method. For purposes of calculating the percentage of time, 
    include volunteer as well as employee hours.

c. Submit [representative] samples of materials you prepared or distributed with regard 
    to these activities (including materials you produced on your website or social 
    media sites).  

[Instruction: Ask 8 if there are facts and circumstances that indicate that there are communications by the organization that appear to constitute political campaign intervention and copies were either provided or located through other means]  

8. Enclosed are communication(s)/materials which appear you produced and/or distributed and which appear to constitute political campaign intervention. Did you produce or distribute this/these communication(s) or materials? If so, provide the following:

a. The period of time during which the communication or material was distributed.

b. The area in which the communication or material was distributed.

c. The percentage of your total expenditures and total time spent on the 
    communication(s)/materials during each of your past taxable years. For purposes 
    of calculating the percentage of expenditures, allocate salaries, administrative, overhead, 
    fundraising, and other general expenditures to these activities using a reasonable method. 
    For purposes of calculating the percentage of time, include volunteer as well as employee 
    hours.

[Instruction: Ask 9 if there are facts and circumstances that indicate that the organization is issuing communications that may constitute political campaign intervention, but copies are not available (i.e. the organization did not provide them, and they cannot be found through other means). If you asked question 8 above, use “(other than those described in question #),” presented in brackets below, filling in the actual question number.]  

9. Have you produced, distributed, or issued communications or materials [(other than those described in question #)] that (i) identify one or more candidates for public office and express approval or disapproval for their positions or actions; and/or (ii) reference voting in an upcoming election? If no, please answer no and you may skip the rest of this question. If yes, please provide the following:

a. Provide a copy of any such communications or materials you have produced or 
   distributed (including materials you produced on your website or social media sites), 
   along with the period of time during which the communication or material was distributed, 
   and the area in which the communication or material was distributed.

b. For any communication or material that expressed approval or disapproval for the 
    positions or actions of a candidate, were the issues discussed in the communication or 
    material also discussed in communications that you distributed after the election in which 
    the candidate was running? If so, provide or describe any such post-election 
    communications or materials.

c. Provide a copy of any publicly disclosable reports regarding such communications or 
    materials that were submitted to the Federal Election Commission or other election 
    authorities.

d. State the percentage of your total expenditures and total time spent on each 
    communication or material during each of your past taxable years. For purposes of 
    calculating the percentage of expenditures, allocate salaries, administrative, overhead, 
    fundraising, and other general expenditures to these communications using a reasonable 
    method. For purposes of calculating the percentage of time, include volunteer as well as 
    employee hours.  

[Instruction: Ask 10 only if the facts and circumstances indicate that the applicant may engage in research and survey activities that could constitute political campaign intervention.]

10. It appears you engage in research and survey activities.

a. Describe how you conduct your research and survey activities, including a description 
    of how you determine survey populations and how you develop your survey questions

b. Describe how you distribute your survey and research results, including whether they 
    are made available to the public.

c. Provide [representative] copies of your survey questions and distributed research results

d. State the percentage of your total expenditures and total funds spent on this activity 
    during each of your past taxable years. Additionally, estimate the percentage of your 
    total expenditures and total time you plan to spend on this activity in the future. For 
    purposes of calculating the percentage of expenditures, allocate salaries, administrative, 
    overhead, fundraising, and other general expenditures to this activity using a 
    reasonable method. For purposes of calculating the percentage of time, include 
    volunteer as well as employee hours.  

[Instruction: Ask 11 only if the facts and circumstances indicate the applicant may hold candidate forums.]  

11. It appears you hold candidate forums. With respect these forums, provide the following information:

a. Do you invite all of the legally qualified candidates for the particular elected 
    office to the events? If not, describe how you determine which candidates to invite.

b. For the legally qualified candidates who did participate at your candidate forum, 
    were each provided an equal opportunity to speak at your event?

c. Describe how you determined what questions to ask of the candidates, including 
    the scope of the subject matter of the questions.

d. Describe how you determined who would present the questions to the candidates.

e. Do you state your support or opposition to any of the candidates at the event?

f. Are candidates asked to agree or disagree with positions of the organization?

g. Does any political fundraising take place at the event?

h. Submit [representative] samples of materials you prepared or distributed with regard 
    to these activities, including materials promoting the events and prepared candidate 
    questions.

i. [Use for Form 1024 only] [State the percentage of your total expenditures and total 
   funds spent on this activity during each of your past taxable years. Additionally, estimate 
   the percentage of your total expenditures and total time you plan to spend on this activity 
   in the future. For purposes of calculating the percentage of expenditures, allocate salaries, 
   administrative, fundraising, overhead, and other general expenditures to this activity using a 
   reasonable method. For purposes of calculating the percentage of time, include volunteer 
   as well as employee hours.]

[Instruction: Ask 12 only if the facts and circumstances indicate that the applicant may have candidates appear at their events.]

12.  It appears you have candidates present at your events. Provide the following information

a. Explain whether they are appearing in their capacity as a candidate. If not, explain 
    why they were chosen to appear.

b. Explain whether during the course of the appearance, any references are made to 
    the individual’s candidacy or to the election.

c. Does any political fundraising take place at the event?

d. Submit [representative] samples of materials you prepared or distributed with 
    regard to these activities, including materials promoting the events.

e. [Use for Form 1024 only] [State the percentage of your total expenditures and total 
   funds spent on this activity during each of your past taxable years. Additionally, estimate 
   the percentage of your total expenditures and total time you plan to spend on this activity 
   in the future. For purposes of calculating the percentage of expenditures, allocate salaries, 
   administrative, overhead, fundraising, and other general expenditures to this activity using a 
   reasonable method. For purposes of calculating the percentage of time, include volunteer 
   as well as employee hours.]

[Instruction: Ask 13 only if the facts and circumstances indicate the applicant may engage in voter registration drives and/or get-out-the-vote drives].  

13. It appears you conduct voter registration drives and/or get-out-the-vote drives. Provide the following information about these activities:

a. State where you conduct these activities and the criteria you use to choose the 
    locations and/or the populations that are registered or encouraged to vote.

b. State whether you ask questions to determine potential voters’ views on issues and 
    candidates prior to registering them to vote. If you do, please explain.

c. Submit [representative] copies of materials you prepared or distributed with regard to 
    these activities, including scripts, flyers, and brochures.

d. [Use for Form 1024 only] [State the percentage of your total expenditures and total 
    funds spent on this activity during each of your past taxable years. Additionally, estimate 
    the percentage of your total expenditures and total time you plan to spend on this activity 
    in the future. For purposes of calculating the percentage of expenditures, allocate salaries, 
    administrative, overhead, fundraising, and other general expenditures to this activity using 
    a reasonable method. For purposes of calculating the percentage of time, include 
    volunteer as well as employee hours.]

[Instruction: Ask 14 only if the facts and circumstances indicate that the applicant may prepare and/or distribute voter guides.]

14. It appears you distribute or publish voter guides. Provide the following information about this activity.

a. Describe how you prepare your voter guide(s), including how you determine which 
    issues are addressed in the guide(s).

b. Do you include all legally qualified candidates in the guide(s)? If you do not, explain 
    why and describe how you determine which candidates to include.

c. If you use a questionnaire to determine candidate positions, explain whether the questions 
    contained in the questionnaire are identical to those provided in the voter guide, whether 
    the candidates have a reasonable amount of time to respond to the questionnaire, whether 
    candidates are given a reasonable opportunity to explain their positions in their own 
    words, and whether the responses in the voter guide are unedited and appear in close 
    proximity to the question to which they respond. Additionally, describe how you treat 
    non-responders.

d. Provide [representative] copies of the voter education guides you have prepared or 
    distributed.

e. [Use for Form 1024 only] [State the percentage of your total expenditures and total 
    funds spent on this activity during each of your past taxable years. Additionally, estimate 
    the percentage of your total expenditures and total time you plan to spend on this activity 
    in the future. For purposes of calculating the percentage of expenditures, allocate salaries, 
    administrative, overhead, fundraising, and other general expenditures to this activity using 
    a reasonable method. For purposes of calculating the percentage of time, include 
    volunteer as well as employee hours.]

[Instruction: Ask 15 if based on the facts and circumstances there is information to indicate that the organization might be providing a private benefit to a particular political party. As a note, it is sufficient to state that “one particular political party” and/or “one or more candidates for public office.” Do not specify by name the political parties or candidates in the question.]

15. It appears you engage in [describe activity]. It appears this activity may be conducted primarily for the benefit of [one particular political party] [and/or] [one or more candidates for public office].

a. Describe these activities in greater detail.

b. State the percentage of your total expenditures and total funds spent on this activity 
    during each of your past taxable years. Additionally, estimate the percentage of your total 
    expenditures and total time you plan to spend on this activity in the future. For purposes 
    of calculating the percentage of expenditures, allocate salaries, administrative, overhead, 
    fundraising, and other general expenditures to this activity using a reasonable method. The 
    percentage of total time should include employee and volunteer hours.

[Instruction: Ask 16 if based on the facts and circumstances there is information to indicate that the net earnings of the applicant may be inuring to the benefit of a candidate who is an officer, director, or founder (or a relative thereof).]

16. Do you support a candidate for public office who is one of your founders, officers, or board members or related to one of your founders, officers, or board members? If yes, please provide the following information:

a. A description of the individual’s relationship to you.

b. State what compensation, if any, you received from the candidate in exchange for the 
    support and whether and how you determined that the compensation was reasonable.  

[Instruction: Ask 17 if the facts and circumstances indicate that the applicant may be connected to a candidate for public office or another exempt organization and the applicant has not fully described its connection.]

17. It appears you are affiliated with [a candidate for public office or other entities such as IRC 501(c) or 527 organizations], provide the following:

a. The name of the candidate or the name and address of the organization(s).

b. A detailed description of your relationship(s), including whether you work with 
    them regularly.

c. A statement of whether you share employees, volunteers, resources, office space, etc. 
    with the organization(s).

d. A copy of any agreements that you entered into with the candidate or organization(s) 
    regarding the sharing of staff, funds, websites and/or other resources.

[Instruction: Ask 18 only if the facts and circumstances indicate that the applicant may engage in grant making to organizations other than those described in Section 501(c)(3) of the Code and that the grant funds may be used by the recipient to engage in political campaign intervention or, in the case of a grant from a Section 501(c)(3) organization, attempts to influence legislation.]

18. It appears you make grants to organizations other than those described under Section 501(c)(3) of the Internal Revenue Code. Describe your grant making program. Your response should include the following:

a. What is the purpose of the grants?

b. What is your criteria for making a grant, and how do you determine that the grants 
    will further your exempt purposes?

c. Describe any procedures you have for ensuring that the grantee uses the grant to 
    further your exempt purposes.

d. Provide [representative] copies of grant agreements and grant proposals.

e. State the percentage of your total expenditures and total funds spent on this activity during 
    each of your past taxable years. Additionally, estimate the percentage of your total 
    expenditures and total time you plan to spend on this activity in the future. For purposes 
    of calculating the percentage of expenditures, allocate salaries, administrative, overhead, 
    fundraising, and other general expenditures to this activity using a reasonable method. For 
    purposes of calculating the percentage of time, include volunteer as well as employee 
    hours.


More information:

See the complete list of Applying for Exemption/Miscellaneous Determination Sample Questions by topic.

 

 

Page Last Reviewed or Updated: 21-Feb-2014