General Instructions

Note.

Terms in bold are defined in the Glossary of the instructions for Form 990.

Purpose of Schedule

Schedule C (Form 990 or 990-EZ) is used by:

  • Section 501(c) organizations, and

  • Section 527 organizations.

These organizations must use Schedule C (Form 990 or 990-EZ) to furnish additional information on political campaign activities or lobbying activities, as those terms are defined below for the various parts of this schedule.

Who Must File

An organization that answered “Yes” on Form 990, Part IV, Checklist of Required Schedules, line 3, 4, or 5, must complete the appropriate parts of Schedule C (Form 990 or 990-EZ) and attach Schedule C to Form 990. An organization that answered “Yes” on Form 990-EZ, Part V, line 46 or Part VI, line 47, must complete the appropriate parts of Schedule C (Form 990 or 990-EZ) and attach Schedule C to Form 990-EZ. An organization that answered "Yes" to Form 990-EZ, Part V, line 35c, because it is subject to the section 6033(e) notice and reporting requirements and proxy tax, must complete Schedule C (Form 990 or 990-EZ), Part III, and attach Schedule C to Form 990-EZ.

If an organization has an ownership interest in a joint venture that conducts political campaign activities or lobbying activities, the organization must report its share of such activity occurring in its tax year on Schedule C (Form 990 or 990-EZ). See Instructions for Form 990, Appendix F. Disregarded Entities and Joint Ventures—Inclusion of Activities and Items.

Part I. Political campaign activities.    Part I is completed by section 501(c) organizations and section 527 organizations that file Form 990 (and Form 990-EZ). If the organization answered “Yes” to Form 990, Part IV, line 3, or Form 990-EZ, Part V, line 46, then complete the specific parts as follows.

  
  • A section 501(c)(3) organization must complete Parts I-A and I-B. Do not complete Part I-C.

  • A section 501(c) organization other than section 501(c)(3) must complete Parts I-A and I-C. Do not complete Part I-B.

  • A section 527 organization that files the Form 990 or Form 990-EZ must complete Part I-A. Do not complete Parts I-B and I-C.

Part II. Lobbying activities.    Part II is completed only by section 501(c)(3) organizations. If the organization answered “Yes” to Form 990, Part IV, line 4, or Form 990-EZ, Part VI, line 47, then complete the specific parts as follows.
  • A section 501(c)(3) organization that elected to be subject to the lobbying expenditure limitations of section 501(h) by filing Form 5768 and for which the election was valid and in effect for its tax year beginning in the year 2014, must complete Part II-A. Do not complete Part II-B.

  • A section 501(c)(3) organization that has not elected to be subject to the lobbying expenditure limitations of section 501(h) (or has revoked such election by filing Form 5768 for which the revocation was valid and in effect for its tax year beginning in the year 2014) must complete Part II-B. Do not complete Part II-A.

Part III. Section 6033(e) notice and reporting requirements and proxy tax.    Part III is completed by section 501(c)(4), section 501(c)(5), and section 501(c)(6) organizations that received membership dues, assessments, or similar amounts as defined in Rev. Proc. 98-19, 1998-7 I.R.B. 30, section 5.01 as adjusted by Rev. Proc. 2013-35, 2013-47 I.R.B. 537, section 3.37 (or latest annual update), and that answered “Yes” to Form 990, Part IV, line 5 or "Yes" to Form 990-EZ, line 35c, regarding the proxy tax.

  If an organization is not required to file Form 990 or Form 990-EZ but chooses to do so, it must file a complete return and provide all of the information requested, including the required schedules.

Definitions

Definitions in this section are applicable throughout this schedule, except where noted. The following terms are defined in the Glossary.

  • Joint venture.

  • Legislation.

  • Lobbying activities.

  • Political campaign activities.

  • Tax year.

See Revenue Ruling 2007-41, 2007-25 I.R.B. 1421, for guidelines on the scope of the tax law prohibition of campaign activities by section 501(c)(3) organizations.

Section 527 exempt function activities.

Section 527 exempt function activities include all functions that influence or attempt to influence the selection, nomination, election, or appointment of any individual to any federal, state, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed.

Political expenditures.

Any expenditures made for political campaign activities are political expenditures. An expenditure includes a payment, distribution, loan, advance, deposit, or gift of money, or anything of value. It also includes a contract, promise, or agreement to make an expenditure, whether or not legally enforceable.

Specific legislation.

Specific legislation includes (1) legislation that has already been introduced in a legislative body and (2) specific legislative proposals that an organization either supports or opposes.

Definitions (Part II-A)

Definitions in this section are applicable only to Part II-A.

Expenditure test.

Under the expenditure test, there are limits both upon the amount of the organization's grassroots lobbying expenditures and upon the total amount of its direct lobbying and grassroots lobbying expenditures. If the electing public charity does not meet this expenditure test, it will owe a section 4911 excise tax on its excess lobbying expenditures. Moreover, if over a 4-year averaging period the organization's average annual total lobbying or grassroots lobbying expenditures are more than 150% of its dollar limits, the organization will lose its exempt status.

Exempt purpose expenditures.

In general, an exempt purpose expenditure is paid or incurred by an electing public charity to accomplish the organization's exempt purpose.

Exempt purpose expenditures include:

  1. The total amount paid or incurred for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or to foster national or international amateur sports competition (not including providing athletic facilities or equipment, other than by qualified amateur sports organizations described in section 501(j)(2));

  2. The allocable portion of administrative expenses paid or incurred for the above purposes;

  3. Amounts paid or incurred to try to influence legislation, whether or not for the purposes described in 1 above;

  4. Allowance for depreciation or amortization; and

  5. Fundraising expenditures, except that exempt purpose expenditures do not include amounts paid to or incurred for either the organization's separate fundraising unit or other organizations, if the amounts are primarily for fundraising.

See Regulations section 56.4911-4(c) for a discussion of excluded expenditures.

Lobbying expenditures.

Lobbying expenditures are expenditures (including allocable overhead and administrative costs) paid or incurred for the purpose of attempting to influence legislation:

  • Through communication with any member or employee of a legislative or similar body, or with any government official or employee who may participate in the formulation of the legislation, and

  • By attempting to affect the opinions of the general public.

To determine if an organization has spent excessive amounts on lobbying, the organization must know which expenditures are lobbying expenditures and which are not lobbying expenditures. An electing public charity's lobbying expenditures for a year are the sum of its expenditures during that year for direct lobbying communications (direct lobbying expenditures) plus grassroots lobbying communications (grassroots lobbying expenditures).

Direct lobbying communications (direct lobbying expenditures).

A direct lobbying communication is any attempt to influence any legislation through communication with:

  • A member or employee of a legislative or similar body;

  • A government official or employee (other than a member or employee of a legislative body) who may participate in the formulation of the legislation, but only if the principal purpose of the communication is to influence legislation; or

  • The general public in a referendum, initiative, constitutional amendment, or similar procedure.

A communication with a legislator or government official will be treated as a direct lobbying communication if, but only if, the communication:

  • Refers to specific legislation, and

  • Reflects a view on such legislation.

Grassroots lobbying communications (grassroots lobbying expenditures).

A grassroots lobbying communication is any attempt to influence any legislation through an attempt to affect the opinions of the general public or any part of the general public.

A communication is generally not a grassroots lobbying communication unless (in addition to referring to specific legislation and reflecting a view on that legislation) it encourages recipients to take action about the specific legislation.

A communication encourages a recipient to take action when it:

  1. States that the recipient should contact legislators;

  2. States a legislator's address, phone number, or similar information;

  3. Provides a petition, tear-off postcard, or similar material for the recipient to send to a legislator; or

  4. Specifically identifies one or more legislators who:

    1. Will vote on legislation;

    2. Opposes the communication's view on the legislation;

    3. Is undecided about the legislation;

    4. Is the recipient's representative in the legislature; or

    5. Is a member of the legislative committee that will consider the legislation.

A communication described in item 4 above generally is grassroots lobbying only if, in addition to referring to and reflecting a view on specific legislation, it is a communication that cannot meet the full and fair exposition test as nonpartisan analysis, study, or research.

Exceptions to lobbying.

In general, engaging in nonpartisan analysis, study, or research and making its results available to the general public or segment of members thereof, or to governmental bodies, officials, or employees is not considered either a direct lobbying communication or a grassroots lobbying communication. Nonpartisan analysis, study, or research may advocate a particular position or viewpoint as long as there is a sufficiently full and fair exposition of the pertinent facts to enable the public or an individual to form an independent opinion or conclusion.

  A communication that responds to a governmental body's or committee's written request for technical advice is not a direct lobbying communication.

  A communication is not a direct lobbying communication if the communication is an appearance before, or communication with, any legislative body concerning action by that body that might affect the organization's existence, its powers and duties, its tax-exempt status, or the deductibility of contributions to the organization, as opposed to affecting merely the scope of the organization's future activities.

Communication with members.

For purposes of section 4911, expenditures for certain communications between an organization and its members are treated more leniently than are communications to nonmembers. Expenditures for a communication that refers to, and reflects a view on, specific legislation are not lobbying expenditures if the communication satisfies the following requirements.

  1. The communication is directed only to members of the organization.

  2. The specific legislation the communication refers to, and reflects a view on, is of direct interest to the organization and its members.

  3. The communication does not directly encourage the member to engage in direct lobbying (whether individually or through the organization).

  4. The communication does not directly encourage the member to engage in grassroots lobbying (whether individually or through the organization).

Expenditures for a communication directed only to members that refers to, and reflects a view on, specific legislation and that satisfies the requirements of items (1), (2), and (4), above (under Grassroots lobbying communications ), but does not satisfy the requirements of item (3), are treated as expenditures for direct lobbying.

Expenditures for a communication directed only to members that refers to, and reflects a view on, specific legislation and satisfies the requirements of items (1) and (2) above, but does not satisfy the requirements of item (4), are treated as grassroots expenditures, whether or not the communication satisfies the requirements of item (3). See Regulations section 56.4911-5 for details.

There are special rules regarding certain paid mass media advertisements about highly publicized legislation; allocation of mixed purpose expenditures; certain transfers treated as lobbying expenditures; and special rules regarding lobbying on referenda, ballot initiatives, and similar procedures. See Regulations sections 56.4911-2 and 56.4911-3.

Affiliated groups.

Members of an affiliated group are treated as a single organization to measure lobbying expenditures. Two organizations are affiliated if one is bound by the other organization's decisions on legislative issues (control) or if enough representatives of one belong to the other organization's governing board to cause or prevent action on legislative issues (interlocking directorate). If the organization is not sure whether its group is affiliated, it may ask the IRS for a ruling letter. There is a fee for this ruling. For information on requesting rulings, see Rev. Proc. 2014-4, 2014-1 I.R.B. 125 (or latest annual update). Also, see Rev. Proc. 2014-8, 2014-1 I.R.B. 242 (or latest annual update).

Members of an affiliated group measure both lobbying expenditures and permitted lobbying expenditures on the basis of the affiliated group's tax year. If all members of the affiliated group have the same tax year, that year is the tax year of the affiliated group. However, if the affiliated group's members have different tax years, the tax year of the affiliated group is the calendar year, unless all the members of the group elect otherwise. See Regulations section 56.4911-7(e)(3).

Limited control.

Two organizations that are affiliated because their governing instruments provide that the decisions of one will control the other only on national legislation are subject to the following provisions.

  • The controlling organization is charged with its own lobbying expenditures and the national legislation expenditures of the affiliated organizations,

  • The controlling organization is not charged with other lobbying expenditures (or other exempt-purpose expenditures) of the affiliated organizations, and

  • Each local organization is treated as though it were not a member of an affiliated group. For example, the local organization should account for its own expenditures only and not for any of the national legislation expenditures deemed as incurred by the controlling organization.

Definitions (Part III)

Definitions in this section are applicable only to Part III.

Lobbying and political expenditures.

For purposes of this section only, lobbying and political expenditures do not include direct lobbying expenditures made to influence local legislation. Nor does it include any political campaign expenditures for which the tax under section 527(f) was paid (see Part I-C). They do include any expenditures for communications with a covered executive branch official in an attempt to influence the official actions or positions of that official.

Covered executive branch official.

Covered executive branch officials include the President, Vice-President, officers and employees of the Executive Office of the President, the two senior level officers of each of the other agencies in the Executive Office, individuals in level I positions of the Executive Schedule and their immediate deputies, and individuals designated as having Cabinet level status and their immediate deputies.

Direct contact lobbying.

This means a:

  1. Meeting,

  2. Telephone conversation,

  3. Letter, or

  4. Similar means of communication that is with a:

    1. Legislator (other than a local legislator), or

    2. Covered executive branch official and that is an attempt to influence the official actions or positions of that official.

In-house expenditures include:

  1. Salaries, and

  2. Other expenses of the organization's officials and staff (including amounts paid or incurred for the planning of legislative activities).

In-house expenditures do not include:

Any payments to other taxpayers engaged in lobbying or political activities as a trade or business or any dues paid to another organization that are allocable to lobbying or political activities.


More Online Instructions