FOR LIVE PROGRAM ONLY Form 990 Schedule C: Mastering Complex Reporting of Political Campaign and Lobbying Activities Avoiding Excise Taxes, Penalties, Fines, and Revocation of Tax-Exempt Status Due to Noncompliance TUESDAY , APRIL 4, 2017, 1:00-2:50 pm Eastern IMPORTANT INFORMATION FOR THE LIVE PROGRAM This program is approved for 2 CPE credit hours . To earn credit you must: • Participate in the program on your own computer connection (no sharing) – if you need to register additional people, please call customer service at 1-800-926-7926 x10 (or 404-881-1141 x10). Strafford accepts American Express, Visa, MasterCard, Discover . • Listen on-line via your computer speakers. • Respond to five prompts during the program plus a single verification code . You will have to write down only the final verification code on the attestation form, which will be emailed to registered attendees. • To earn full credit, you must remain connected for the entire program. WHO TO CONTACT DURING THE LIVE EVENT For Additional Registrations : -Call Strafford Customer Service 1-800-926-7926 x10 (or 404-881-1141 x10) For Assistance During the Live Program : -On the web, use the chat box at the bottom left of the screen If you get disconnected during the program, you can simply log in using your original instructions and PIN.
Tips for Optimal Quality FOR LIVE PROGRAM ONLY Sound Quality When listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, please e-mail sound@straffordpub.com immediately so we can address the problem.
Form 990 Schedule C April 4, 2017 Deborah Kaminski, Director of Tax Exempt Organizations DZH Phillips, San Francisco dkaminski@dzhphillips.com Eric K. Gorovitz, Principal Adler & Colvin, San Francisco egorovitz@adlercolvin.com
Notice ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY THE SPEAKERS’ FIRMS TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN. You (and your employees, representatives, or agents) may disclose to any and all persons, without limitation, the tax treatment or tax structure, or both, of any transaction described in the associated materials we provide to you, including, but not limited to, any tax opinions, memoranda, or other tax analyses contained in those materials. The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.
FORM 990 SCHEDULE C: Mastering Complex Reporting of Political Campaign and Lobbying Activities dzhphillips.com 3/31/2017
Eric K. Gorovitz Principal, Adler & Colvin Mr. Gorovitz's practice spans the full range of nonprofit and tax-exempt legal issues, with emphasis on political advocacy and nonprofit corporate governance. He frequently presents on non-profit issues. egorovitz@adlercolvin.com dzhphillips.com 6 3/31/2017
Deborah Kaminski Director Of Tax Exempt Organizations, DZH Phillips Ms. Kaminski has spent 20 years in the nonprofit taxation and trust industry. She specializes in taxation of non-traditional investments, trust dissolutions, distribution calculations, excess-benefit transactions, and tax advisory services regarding nonprofit entities. She also helps clients identify and resolve compliance oversight. dkaminski@dzhphillips.com dzhphillips.com 7 3/31/2017
AGENDA Schedule C Parts I & II Lobbying and Political Action Part III Proxy tax Planning Considerations dzhphillips.com 8 3/31/2017
INTRODUCTION a. Distribution of lobbying and political activities across the exempt organization spectrum b. 501(c)(3) – Charitable, Religious, Educational, Scientific i. Private foundation: no lobbying ii. Public charity: limited lobbying iii. No candidate campaign intervention c. 501(c)(4) – Civic Leagues & Social Welfare Orgs. d. 501(c)(5) – Labor, Agricultural & Horticultural Orgs. e. 501(c)(6) – Business Leagues dzhphillips.com 9 3/31/2017
FORM 990 “TRIGGER” QUESTIONS dzhphillips.com 3/31/2017
FORM 990 “TRIGGER” QUESTIONS Part IV, Line 3: Political activities? Sch. C, Part I (All Types) Part IV, Line 4: Lobbying, or 501(h) election? Sch. C, Part II (501(c)(3) only) Part IV, Line 5: Subject to proxy tax? Sch. C, Part III (501(c)(4-6) only) dzhphillips.com 11 3/31/2017
FORM 990, SCHEDULE C Part I: Political Activities (All Types) Part II (A&B) : Lobbying Activities (501(c)(3) only) Part III: Proxy Tax (501(c)(4-6) only) Part IV: Supplemental Info (All types) dzhphillips.com 12 3/31/2017
BAGELS AND POLITICS Two entities: 501(c)(3): Bagels Are Good Eating League (B.A.G.E.L.) conducts research and educates the public about the features and merits of quality bagels 501(c)(6): American Bagel Association (A.B.A.) is a membership organization that promotes the line of business of bagel making in various ways dzhphillips.com 13 3/31/2017
BAGEL ACTIVITIES Public education: o Hosting non-partisan candidate forum $ 50,000 o Education about quality bagels $ 250,000 o Research and reports on bagel issues $ 500,000 o Nonpartisan analysis of seed preferences $ 25,000 Public Education: $ 825,000 Influencing legislation on bagels: o Grant to support a state ballot measure $ 20,000 o Encouraging the public to contact Congress $ 50,000 o BAGEL Lobby Day (including 200 volunteer hours) $ 55,000 Influencing Leg. $ 125,000 $ 950,000 Contribution to pro-bagel candidate: $ 50,000 $ 50,000 Total Program Expenses $1,000,000 $1,000,000 dzhphillips.com 14 3/31/2017
BAGEL FUNCTIONAL EXPENSE ALLOCATION Form 990, Page 10 Program Expenses: $1,000,000 Fundraising Expenses: $ 100,000 Capital Expenses $ 100,000 Total Expenses: $1,200,000 dzhphillips.com 15 3/31/2017
BAGEL’S FORM 990: Part IV, Line 3: Political activities? Yes. (UH-OH . . .) Sch. C, Part I Part IV, Line 4: Lobbying, or 501(h) election? Yes. Sch. C, Part II Part IV, Line 5: Subject to proxy tax? No. SKIP Sch. C, Part III dzhphillips.com 17 3/31/2017
50,000 200 dzhphillips.com 18 3/31/2017
HOW TO COMPLETE Part 1-A Line 1: Description of filing organization’s own political activities; not SSF activities; narrative on Part IV (just lines for text) Line 2: Political activity expenditures Line 3: Estimate of volunteer hours on political activities (using “any reasonable method” for estimation) dzhphillips.com 19 3/31/2017
HOW TO COMPLETE Part 1-B Used for c3 to disclose excise taxes under IRC § 4955 for political campaign activity. SHOULD BE BLANK because c3 should never conduct these activities. Amount of tax = 10% Line 4 requires description of steps taken to correct improper expenditures i. Recovery ii. Safeguards to prevent dzhphillips.com 20 3/31/2017
BAGEL’S FORM 990: Part IV, Line 3: Political activities? Yes. (UH-OH . . .) Sch. C, Part I Part IV, Line 4: Lobbying, or 501(h) election? Yes. Sch. C, Part II Part IV, Line 5: Subject to proxy tax? No. SKIP Sch. C, Part III dzhphillips.com 21 3/31/2017
LOBBYING a. All activities intended to influence foreign, national, state or local legislation b. Two Types: i. Direct lobbying: attempting to influence the legislators ii. Grassroots Lobbying: attempting to influence legislation by influencing the general public dzhphillips.com 22 3/31/2017
“NO SUBSTANTIAL PART” Limit for Public Charities a. How much is “Substantial”? b. Consequences for engaging in “substantial” lobbying i. Sec. 4911 excise tax (electing charity) ii. Sec. 4912 excise tax (non-electing charity) ii. Possible loss of tax-exemption c. 501-h Election for clear definitions i. Establishes the Lobbying Ceiling Amount ii. Establishes an annual and 4-year-aggregate limit for both total and grassroots lobbying expenses iii. Counts expenditures only ; no- cost activities don’t affect limit iv. Form 5768 – in effect until rescinded by org. v. Not available to Churches, Private Foundations dzhphillips.com 23 3/31/2017
LOBBYING Schedule C, Part II-A (501(h) Elector) a. Lines 1a-j: a. Direct and grassroots lobbying expenditures for the tax year b. Calculate total and grassroots lobbying limits for the tax year c. Limits are portion of “exempt purpose expenditures” b. Lines 2a-f: a. Aggregate lobbying limits, expenditures over 4 years b. Calculate “ceiling amounts” (150% of aggregate limit) c. Excess (if any) determines whether exempt status at risk dzhphillips.com 24 3/31/2017
EXEMPT PURPOSE EXPENDITURES Included: i. Program expenses (lobbying and non-lobbying) ii. Staff compensation (including deferred comp) iii. Depreciation iv. Administrative expenses allocated to exempt purpose accomplishment v. Limited fundraising expenses Excluded: i. Most fundraising expenses (internal or external) ii. Capital expenses iii. Expenses to generate unrelated income iv. UBIT dzhphillips.com 25 3/31/2017
dzhphillips.com 26 3/31/2017
dzhphillips.com 27 3/31/2017
Recommend
More recommend
