2006 Instructions For Schedule A (Form 990 Or 990-Ez) (Page 12 of 15) in pdf

viewpoint as long as there is a sufficiently

affiliated group’s excess lobbying

attached schedule, show the amounts

full and fair exposition of the pertinent

expenditures.

that apply to each affiliated group and to

facts to enable the public or an individual

each group member.

To find a member’s proportionate

to form an independent opinion or

If the parent organization has made

share, see Regulations section

conclusion.

the lobbying expenditure election, its

56.4911-8(d). Enter the proportionate

A communication that responds to a

separate return must also show in column

share in column (b) on line 43 or line 44,

governmental body’s or committee’s

(a) the amounts that apply to the affiliated

or on both lines.

written request for technical advice is not

group as a whole and, in column (b), the

Attached schedule. Attach a

a direct lobbying communication.

amounts that apply to the parent

schedule showing each affiliated group

organization only.

A communication is not a direct

member’s name, address, EIN, and

lobbying communication if the

A subordinate organization not

expenses. Use the format of Part VI-A for

communication is an appearance before,

included in the group return would also

this schedule. Show which members

or communication with, any legislative

complete column (a) for the affiliated

elected and which did not.

body whose action might affect the

group as a whole and column (b) for itself

Include each electing member’s share

organization’s existence, its powers and

only.

of the excess lobbying expenditures on

duties, its tax-exempt status, or the

However, if limited control (defined

the attached schedule. Nonelecting

deductibility of contributions to the

above) exists, complete only column (b)

members do not owe tax, but remain

organization, as opposed to affecting

in Part VI-A of the group return for the

subject to the general rule, which

merely the scope of the organization’s

electing members in the group.

provides that no substantial part of their

future activities.

activities may consist of carrying on

Attach a schedule to show the

Affiliated groups. Treat members of an

propaganda or otherwise trying to

amounts that apply to each electing

affiliated group as a single organization to

influence legislation.

member.

measure lobbying expenditures and

Limited control. If two organizations

In the separate returns filed by the

permitted lobbying expenditures.

are affiliated because their governing

parent and by any subordinate

Two organizations are affiliated if one

instruments provide that the decisions of

organizations not included in the group

is bound by the other organization’s

one will control the other only on national

return, complete only column (b).

decisions on legislative issues (control) or

legislation, apply expenditures as follows:

Lines 36 through 44. Complete

•

if enough representatives of one belong

Charge the controlling organization with

column (b) for any organization using Part

to the other organization’s governing

its own lobbying expenditures and the

VI-A but complete column (a) only for

board to cause or prevent action on

national legislation expenditures of the

affiliated groups.

legislative issues (interlocking

affiliated organizations.

•

Use lines 36 through 44 to determine

directorate).

Do not charge the controlling

whether any of the organization’s current

organization with other lobbying

If the organization is not sure whether

year lobbying expenditures are subject to

expenditures (or other exempt-purpose

its group is affiliated, it may ask the IRS

tax. File Form 4720 if the organization

expenditures) of the affiliated

for a ruling letter. There is a fee for this

needs to report and pay the excise tax.

organizations, and

ruling.

•

Lines 45 through 50. Lines 45

Treat each local organization as though

For Information on requesting rulings,

through 50 are used to determine if the

it were not a member of an affiliated

see Rev. Proc. 2007-4, 2007-1 I.R.B. 118.

organization exceeded lobbying

group; for example, the local organization

Members of an affiliated group

expenditure limits during the 4-year

should account for its own expenditures

measure both lobbying expenditures and

averaging period.

only and not any of the national legislation

permitted lobbying expenditures on the

expenditures deemed as incurred by the

Any organization for which a lobbying

basis of the affiliated group’s tax year. If

controlling organization.

expenditure election under section 501(h)

all members of the affiliated group have

was in effect for its tax year beginning in

When this type of limited control is

the same tax year, that year is the tax

2006 must complete columns (a) through

present, each member of the affiliated

year of the affiliated group.

(e) of lines 45 through 50 except in the

group should complete column (b) only.

However, if the affiliated group’s

following situations.

Group returns. Although membership

members have different tax years, the tax

1. An organization first treated as a

in a group affiliated for lobbying does not

year of the affiliated group is the calendar

section 501(c)(3) organization in its tax

establish eligibility to file a group return, a

year, unless all the members of the group

year beginning in 2006 does not have to

group return can sometimes meet the

elect otherwise. See Regulations section

complete any part of lines 45 through 50.

filing requirements of more than one

56.4911-7(e)(3).

2. An organization does not have to

member of an affiliated group. (General

If the electing organization belongs to

complete lines 45 through 50 for any

Instruction R of the Instructions for Form

an affiliated group, complete in Part VI-A,

period before it is first treated as a section

990 and Form 990-EZ explains who may

lines 36 through 44:

501(c)(3) organization.

file a group return.)

•

Column (a) for the affiliated group as a

3. If 2006 is the first year for which an

If a central or parent organization files

whole, and

organization’s first section 501(h) election

•

a group return on behalf of two or more

Column (b) for the electing member of

is effective, that organization must

members of the group, complete column

the group.

complete line 45, columns (a) and (e).

(a), Part VI-A, for the affiliated group as a

If there are no excess lobbying

The organization must then complete

whole. Include the central, electing, and

expenditures on either line 43 or 44 of

all of column (e) to determine whether the

nonelecting members.

column (a), treat each electing member

amount on line 47, column (e), is equal to

In column (b), except on lines 43 and

as having no excess lobbying

or less than the lobbying ceiling amount

44, include the amounts that apply to all

expenditures.

calculated on line 46 and whether the

electing members of the group if they are

amount on line 50 is equal to or less than

However, if there are excess lobbying

included in the group return.

the grassroots ceiling amount calculated

expenditures on either line 43 or 44 of

Attach the schedule described above

on line 49.

column (a), treat each electing member

under Affiliated groups. Show what

as having excess lobbying expenditures.

The organization does not satisfy both

amounts apply to each group member.

In such case, each electing member must

tests if either its total lobbying

file Form 4720, Return of Certain Excise

If the group return includes

expenditures or grassroots lobbying

Taxes Under Chapters 41 and 42 of the

organizations that belong to more than

expenditures exceed the applicable

Internal Revenue Code, and must pay the

one affiliated group, show in column (a)

ceiling amounts. When this occurs, all five

tax on its proportionate share of the

the totals for all such groups. On the

columns must be completed and a

-12-

Instructions for Schedule A (Form 990 or 990-EZ)

2006 Instructions For Schedule A (Form 990 Or 990-Ez) Page 12

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