Private Foundation Taxable Expenditures: Lobbying exception for technical advice or assistance


Taxes on lobbying expenditures do not apply to amounts paid or incurred in connection with providing technical advice or assistance to a governmental body, a government committee, or a subdivision of either, in response to a written request.  Under this exception, the request for assistance or advice must be made in the name of the requesting governmental body, committee, or subdivision rather than an individual member.  Similarly, the response to the request must be available to every member of the requesting body, committee or subdivision.

Nature of technical advice or assistance.  Technical advice or assistance may be given as a result of knowledge or skill in a given area.  Because this assistance or advice may be given only at the express request of a governmental body, committee or subdivision, the oral or written presentation of assistance or advice need not qualify as nonpartisan analysis, study or research.  Offering opinions or recommendations will ordinarily qualify under this exception only if the opinions or recommendations are specifically requested by the governmental body, committee or subdivision or are directly related to the materials requested.

     Example 1.  A Congressional committee is studying the feasibility of legislation to provide funds for scholarships to U.S. students attending schools abroad.  X, a private foundation that has engaged in a private scholarship program of this kind, is asked, in writing, by the committee to describe the manner in which it selects candidates for its program.  X's response, disclosing its methods of selection, is technical advice or assistance.

     Example 2.   Assume the same facts given in Example 1, except that X's response not only includes a description of its own grant-making procedures, but also includes its views regarding the wisdom of adopting such a program.  Because these views are directly related to the subject matter of the request for technical advice or assistance, the amount paid or incurred for the presentation of these views is not a taxable expenditure.  However, the amount paid or incurred in connection with a response that is not directly related to the subject matter of the request for technical advice or assistance would be a taxable expenditure unless the presentation can qualify as making available nonpartisan analysis, study or research.

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