26 U.S.C. § 4955 : US Code - Section 4955: Taxes on political expenditures of section 501(c)(3) organizations

Search 26 U.S.C. § 4955 : US Code - Section 4955: Taxes on political expenditures of section 501(c)(3) organizations

(a) Initial taxes
(1) On the organization
There is hereby imposed on each political expenditure by a
section 501(c)(3) organization a tax equal to 10 percent of the
amount thereof. The tax imposed by this paragraph shall be paid
by the organization.
(2) On the management
There is hereby imposed on the agreement of any organization
manager to the making of any expenditure, knowing that it is a
political expenditure, a tax equal to 2 1/2 percent of the
amount thereof, unless such agreement is not willful and is due
to reasonable cause. The tax imposed by this paragraph shall be
paid by any organization manager who agreed to the making of the
expenditure.
(b) Additional taxes
(1) On the organization
In any case in which an initial tax is imposed by subsection
(a)(1) on a political expenditure and such expenditure is not
corrected within the taxable period, there is hereby imposed a
tax equal to 100 percent of the amount of the expenditure. The
tax imposed by this paragraph shall be paid by the organization.
(2) On the management
In any case in which an additional tax is imposed by paragraph
(1), if an organization manager refused to agree to part or all
of the correction, there is hereby imposed a tax equal to 50
percent of the amount of the political expenditure. The tax
imposed by this paragraph shall be paid by any organization
manager who refused to agree to part or all of the correction.
(c) Special rules
For purposes of subsections (a) and (b) -
(1) Joint and several liability
If more than 1 person is liable under subsection (a)(2) or
(b)(2) with respect to the making of a political expenditure, all
such persons shall be jointly and severally liable under such
subsection with respect to such expenditure.
(2) Limit for management
With respect to any 1 political expenditure, the maximum amount
of the tax imposed by subsection (a)(2) shall not exceed $5,000,
and the maximum amount of the tax imposed by subsection (b)(2)
shall not exceed $10,000.
(d) Political expenditure
For purposes of this section -
(1) In general
The term "political expenditure" means any amount paid or
incurred by a section 501(c)(3) organization in any participation
in, or intervention in (including the publication or distribution
of statements), any political campaign on behalf of (or in
opposition to) any candidate for public office.
(2) Certain other expenditures included
In the case of an organization which is formed primarily for
purposes of promoting the candidacy (or prospective candidacy) of
an individual for public office (or which is effectively
controlled by a candidate or prospective candidate and which is
availed of primarily for such purposes), the term "political
expenditure" includes any of the following amounts paid or
incurred by the organization:
(A) Amounts paid or incurred to such individual for speeches
or other services.
(B) Travel expenses of such individual.
(C) Expenses of conducting polls, surveys, or other studies,
or preparing papers or other materials, for use by such
individual.
(D) Expenses of advertising, publicity, and fundraising for
such individual.
(E) Any other expense which has the primary effect of
promoting public recognition, or otherwise primarily accruing
to the benefit, of such individual.
(e) Coordination with sections 4945 and 4958
If tax is imposed under this section with respect to any
political expenditure, such expenditure shall not be treated as a
taxable expenditure for purposes of section 4945 or an excess
benefit for purposes of section 4958.
(f) Other definitions
For purposes of this section -
(1) Section 501(c)(3) organization
The term "section 501(c)(3) organization" means any
organization which (without regard to any political expenditure)
would be described in section 501(c)(3) and exempt from taxation
under section 501(a).
(2) Organization manager
The term "organization manager" means -
(A) any officer, director, or trustee of the organization (or
individual having powers or responsibilities similar to those
of officers, directors, or trustees of the organization), and
(B) with respect to any expenditure, any employee of the
organization having authority or responsibility with respect to
such expenditure.
(3) Correction
The terms "correction" and "correct" mean, with respect to any
political expenditure, recovering part or all of the expenditure
to the extent recovery is possible, establishment of safeguards
to prevent future political expenditures, and where full recovery
is not possible, such additional corrective action as is
prescribed by the Secretary by regulations.
(4) Taxable period
The term "taxable period" means, with respect to any political
expenditure, the period beginning with the date on which the
political expenditure occurs and ending on the earlier of -
(A) the date of mailing a notice of deficiency under section
6212 with respect to the tax imposed by subsection (a)(1), or
(B) the date on which tax imposed by subsection (a)(1) is
assessed.