Instructions for F Instructions for Form 990 or 990 EZ (Schedule C)

2019

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

Department of the Treasury
Internal Revenue Service

Political Campaign and Lobbying Activities
Section references are to the Internal Revenue
Code unless otherwise noted.

Future Developments

For the latest information about
developments related to Schedule C
(Form 990 or 990-EZ) and its instructions,
such as legislation enacted after they were
published, go to www.irs.gov/Form990.

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
later 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" on 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.
Sep 18, 2019

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” on 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. Don’t
complete Part I-C.
• A section 501(c) organization other
than section 501(c)(3) must complete
Parts I-A and I-C. Don’t complete Part I-B.
• A section 527 organization that files the
Form 990 or Form 990-EZ must complete
Part I-A. Don’t complete Parts I-B and I-C.
Part II. Lobbying activities. Part II is
completed by only section 501(c)(3)
organizations. If the organization
answered “Yes” on 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 2019, must
complete Part II-A. Don’t complete Part
II-B.
• A section 501(c)(3) organization that
hasn’t 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 2019) must complete
Part II-B. Don’t 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, 1998-1 C.B.
547 (or latest annual update), and that
answered “Yes” on Form 990, Part IV,
line 5 or "Yes" on Form 990-EZ, line 35c,
regarding the proxy tax.
If an organization isn’t 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.
Cat. No. 20374L

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,

TIP 2007-25 I.R.B. 1421, available at

www.irs.gov/IRB2007-25, for
guidelines on the scope of the tax law
prohibition on 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 to
only 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 doesn’t 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 earlier purposes;
3. Amounts paid or incurred to try to
influence legislation, whether or not for the
purposes described in 1 earlier;
4. Allowance for depreciation or
amortization; and
5. Fundraising expenditures, except
that exempt purpose expenditures don’t
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 aren’t 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 if the
principal purpose of the communication is
to influence legislation only; 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 the
communication only:
• 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:
a. Will vote on legislation;
b. Opposes the communication's view
on the legislation;
c. Is undecided about the legislation;
d. Is the recipient's representative in
the legislature; or
e. Is a member of the legislative
committee that will consider the
legislation.
A communication described in item 4
earlier generally is grassroots lobbying
only if, in addition to referring to and
reflecting a view on specific legislation, it
is a communication that can’t meet the full
and fair exposition test as nonpartisan
analysis, study, or research.
Exceptions to lobbying. In general,
engaging in nonpartisan analysis, study,
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or research and making its results
available to the general public or segment
of members thereof, or to governmental
bodies, officials, or employees isn’t
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 isn’t a
direct lobbying communication.
A communication isn’t 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 aren’t
lobbying expenditures if the
communication satisfies the following
requirements.
1. The communication is directed to
only 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 doesn’t directly
encourage the member to engage in direct
lobbying (whether individually or through
the organization).
4. The communication doesn’t directly
encourage the member to engage in
grassroots lobbying (whether individually
or through the organization).
Expenditures for a communication
directed to only members that refers to,
and reflects a view on, specific legislation
and that satisfies the requirements of
items (1), (2), and (4), earlier (under
Grassroots lobbying
communications), but doesn’t satisfy the
requirements of item (3), are treated as
expenditures for direct lobbying.
Expenditures for a communication
directed to only members that refers to,
and reflects a view on, specific legislation
and satisfies the requirements of items (1)

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

and (2) earlier, but doesn’t 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 isn’t 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. 2019-5, 2019-1 I.R.B. 230,
available at www.irs.gov/pub/irs-irbs/
irb19-01.pdf (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 on only 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 isn’t
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 to
only Part III.
Lobbying and political
expenditures. For purposes of this
section only, lobbying and political
expenditures don’t 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.
a:

Direct contact lobbying. This means

1. Meeting,
2. Telephone conversation,
3. Letter, or
4. Similar means of communication
that is with a:
a. Legislator, or
b. 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 don’t
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.

Specific Instructions
Part I-A. Political Activity
of Exempt Organizations
Note. Section 501(c) organizations other
than those exempt under section 501(c)(3)
may establish section 527(f)(3) separate
segregated funds to engage in political
activity. Separate segregated funds are
subject to their own filing requirements. A
section 501(c) organization that engages
a separate segregated fund to conduct
political activity should report transfers to

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

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the fund in Parts I-A and I-C. The separate
segregated fund should report specific
activities on its own Form 990 if the fund is
required to file.
Line 1. Section 501(c) organizations
should provide a detailed description of
their direct and indirect political
campaign activities in Part IV. If the
section 501(c) organization collects
political contributions or member dues
earmarked for a separate segregated
fund, and promptly and directly transfers
them to that fund as prescribed in
Regulations section 1.527-6(e), don’t
report them here. Such amounts should
be reported in Part I-C, line 5e.
Section 527 organizations should
provide a detailed description of their
exempt function activities in Part IV.
Line 2. Enter the total amount that the
filing organization has spent conducting
the activities described on line 1.
Line 3. If the organization used volunteer
labor for its political campaign activities
or section 527 exempt function activities,
provide the total number of hours. Any
reasonable method may be used to
estimate this amount.

Part I-B. Section 501(c)(3)
Organizations—
Disclosure of Excise
Taxes Imposed Under
Section 4955

Section 501(c)(3) organizations must
disclose any excise tax incurred during the
year under section 4955 (political
expenditures), unless abated. See
sections 4962 and 6033(b).
Line 1. Enter the amount of taxes
incurred by the organization itself under
section 4955, unless abated. If no tax was
incurred, enter -0-.
Line 2. Enter the amount of taxes
incurred by the organization managers
under section 4955, unless abated. If no
tax was incurred, enter -0-.
Line 3. If the filing organization reported a
section 4955 tax on a Form 4720, Return
of Certain Excise Taxes Under Chapters
41 and 42 of the Internal Revenue Code,
for the tax year, answer “Yes.”
Line 4. Describe in Part IV the steps
taken by the organization to correct the
activity that subjected it to the section
4955 tax. Correction of a political
expenditure means recovering the
expenditure to the extent possible and
establishing safeguards to prevent future
political expenditures. Recovery of the
expenditure means recovering part or all
of the expenditure to the extent possible,
and, where full recovery can’t be
accomplished, by any additional

corrective action that is necessary. (The
organization that made the political
expenditure isn’t under any obligation to
attempt to recover the expenditure by
legal action if the action would in all
probability not result in the satisfaction of
or execution on a judgment.)

Part I-C. Section 527
Exempt Function Activity
of Section 501(c)
Organizations Other Than
Section 501(c)(3)
Note. Section 501(c) organizations that
collect political contributions or member
dues earmarked for a separate
segregated fund, and promptly and
directly transfer them to that fund as
prescribed in Regulations section
1.527-6(e), don’t report them on lines 1 or
2. Such amounts are reported on line 5e.
Line 1. Enter the amount of the
organization's funds that it expended for
section 527 exempt function activities.
See Regulations section 1.527-6(b).
Line 2. Enter the amount of the
organization's funds that it transferred to
other organizations, including a separate
segregated section 527(f)(3) fund created
by the organization, for section 527
exempt function activity.
Line 3. Total exempt function
expenditures. Add lines 1 and 2 and enter
on line 3 and on Form 1120-POL, line 17b.
Line 4. If the filing organization reported
taxable political expenditures on Form
1120-POL for this year, answer “Yes.”
Line 5. In columns (a), (b), and (c), enter
the name, address and employer
identification number (EIN) of each
section 527 political organization to which
payments were made. In column (d), enter
the amount paid from the filing
organization's funds. In column (e), enter
the amount of political contributions
received and promptly and directly
delivered to a separate political
organization, such as a separate
segregated fund or a political action
committee (PAC). If additional space is
needed, enter information in Part IV.

Part II-A. Lobbying Activity

Only section 501(c)(3) organizations that
have filed Form 5768 (election under
section 501(h)) complete this section.

Part II-A provides a reporting format for
any section 501(c)(3) organization for
which the 501(h) lobbying expenditure
election was valid and in effect during the
2019 tax year, whether or not the
organization engaged in lobbying
activities during that tax year. A public
charity that makes a valid section 501(h)

election may spend up to a certain
percentage of its exempt purpose
expenditures to influence legislation
without incurring tax or losing its tax
exempt status.
Affiliated groups. If the filing
organization belongs to an affiliated group,
check Part II-A, box A and complete lines
1a through 1i.
• Complete column (a) for the electing
member of the group.
• Complete column (b) for the affiliated
group as a whole.
If the filing organization checked box A
and the limited control provisions apply to
the organizations in the affiliated group,
each member of the affiliated group
should check box B and complete only
column (a).
If the filing organization doesn’t check
box A, don’t check box B.
Affiliated group list. Provide in Part
IV a list showing each affiliated group
member's name, address, EIN, and
expenses. Show which members made
the election under section 501(h) and
which didn’t.
Include each electing member's share
of the excess lobbying expenditures on
the list.
Nonelecting members don’t owe tax,
but remain subject to the general rule,
which provides that no substantial part of
their activities may consist of carrying on
propaganda or otherwise trying to
influence legislation.
Lines 1a through 1i. Complete lines 1a
through 1i in column (a) for any
organization required to complete Part
II-A, but complete column (b) for only
affiliated groups.
Lines 1a through 1i are used to
determine whether any of the
organization's current year lobbying
expenditures are subject to tax under
section 4911. File Form 4720 if the
organization needs to report and pay the
excise tax.
Line 1a. Enter the amount the
organization expended for grassroots
lobbying communications. See
Regulations section 56.4911-6(b).
Line 1b. Enter the amount the
organization expended for direct lobbying
communications. See Regulations
section 56.4911-6(b).
Line 1c. Add lines 1a and 1b.
Line 1d. Enter all other amounts
(excluding lobbying) the organization
expended to accomplish its exempt
purpose.
Line 1e. Add lines 1c and 1d. This is
the organization's total exempt purpose
expenditures.
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Lines 1h and 1i. If there are no
excess lobbying expenditures on either
line 1h or 1i of column (b), treat each
electing member of the affiliated group as
having no excess lobbying expenditures.
However, if there are excess lobbying
expenditures on either line 1h or 1i of
column (b), treat each electing member as
having excess lobbying expenditures. In
such case, each electing member must
file Form 4720, and must pay the tax on its
proportionate share of the affiliated
group's excess lobbying expenditures.
Enter the proportionate share in column
(a) on line 1h or line 1i, or on both lines. In
Part IV, provide the affiliated group list
described earlier. Show what amounts
apply to each group member. To find a
member's proportionate share, see
Regulations section 56.4911-8(d).
Line 1j. If the filing organization
reported section 4911 tax on Form 4720
for this year, answer “Yes.”
Line 2. Line 2 is used to determine if the
organization exceeded lobbying
expenditure limits during the 4-year
averaging period.
Any organization for which a lobbying
expenditure election under section 501(h)
was in effect for its tax year beginning in
2019 must complete columns (a) through
(e) of lines 2a through 2f except in the
following situations.
1. An organization first treated as a
section 501(c)(3) organization in its tax
year beginning in 2019 doesn’t have to
complete any part of lines 2a through 2f.
2. An organization doesn’t have to
complete lines 2a through 2f for any
period before it is first treated as a section
501(c)(3) organization.
3. If 2019 is the first year for which an
organization's section 501(h) election is
effective, that organization must complete
line 2a, columns (d) and (e). The
organization must then complete all of
column (e) to determine whether the
amount on line 2c, column (e), is equal to
or less than the lobbying ceiling amount
calculated on line 2b and whether the
amount on line 2f is equal to or less than
the grassroots ceiling amount calculated
on line 2e. The organization doesn’t
satisfy both tests if either its total lobbying
expenditures or grassroots lobbying
expenditures exceed the applicable
ceiling amounts. When this occurs, all five
columns must be completed and a
re-computation made unless exception 1
or 2 earlier applies.
4. If 2019 is the second or third tax
year for which the organization's first
section 501(h) election is in effect, that
organization is required to complete only
the columns for the years in which the
election has been in effect, entering the
totals for those years in column (e). The

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

organization must determine, for those 2
or 3 years, whether the amount entered in
column (e), line 2c, is equal to or less than
the lobbying ceiling amount reported on
line 2b, and whether the amount entered
in column (e), line 2f, is equal to or less
than the grassroots ceiling amount
calculated on line 2e. The organization
doesn’t satisfy both tests if either its total
lobbying expenditures or grassroots
lobbying expenditures exceed applicable
ceiling amounts. When that occurs, all five
columns must be completed and a
re-computation made, unless exception 1
or 2 earlier applies. If the organization isn’t
required to complete all five columns,
provide a statement explaining why in Part
IV. In the statement, show the ending date
of the tax year in which the organization
made its first section 501(h) election and
state whether or not that first election was
revoked before the start of the
organization's tax year that began in 2019.
Note. If the organization belongs to an
affiliated group, enter the appropriate
affiliated group totals from column (b),
lines 1a through 1i, when completing lines
2a, 2c, 2d, and 2f.
Line 2a. For 2016, 2017, 2018, and
2019, enter the amount from Schedule C
(Form 990 or 990-EZ), Part II-A, line 1f,
filed for each year.
Line 2c. For 2016, 2017, 2018, and
2019, enter the amount from Schedule C
(Form 990 or 990-EZ), Part II-A, line 1c,
for each year.
Line 2d. For 2016, 2017, 2018, and
2019, enter the amount from Schedule C
(Form 990 or 990-EZ), Part II-A, line 1g,
for each year.
Line 2f. For 2016, 2017, 2018, and
2019, enter the amount from Schedule C
(Form 990 or 990-EZ), Part II-A, line 1a,
for each year.
Enter the total for each line in column
(e).

Part II-B. Lobbying Activity
Only section 501(c)(3) organizations that
haven’t filed Form 5768 (election under
section 501(h)) or have revoked a
previous election can complete this
section.

Part II-B provides a reporting format for
any section 501(c)(3) organization that
engaged in lobbying activities during the
2019 tax year but didn’t make a section
501(h) lobbying expenditure election for
that year by filing Form 5768. The
distinction in Part II-A between direct and
grassroots lobbying activities by
organizations that made the section
501(h) election doesn’t apply to
organizations that complete Part II-B.

Nonelecting section 501(c)(3)
organizations must complete Part II-B,
columns (a) and (b), to show lobbying
expenditures paid or incurred.
Note. A nonelecting organization will
generally be regarded as engaging in
lobbying activity if the organization either
contacts, or urges the public to contact,
members of a legislative body for the
purpose of proposing, supporting, or
opposing legislation or the government's
budget process; or advocates the
adoption or rejection of legislation.
Organizations should answer “Yes” or
“No” in column (a) to questions 1a through
1i and provide in Part IV a detailed
description of any activities the
organization engaged in (through its
employees or volunteers) to influence
legislation. The description should include
all lobbying activities, whether expenses
were incurred or not. Examples of such
lobbying activities include:
• Sending letters or publications to
government officials or legislators,
• Meeting with or calling government
officials or legislators,
• Sending or distributing letters or
publications (including newsletters,
brochures, etc.) to members or to the
general public, or
• Using direct mail, placing
advertisements, issuing press releases,
holding news conferences, or holding
rallies or demonstrations.
For lines 1c through 1i, enter in column
(b) the lobbying expenditures paid or
incurred. Enter total expenditures on
column (b), line 1j.
Line 1f. Grants to other organizations are
amounts from the organization's funds
given to another organization for the
purpose of assisting the other organization
conducting lobbying activities.
Line 1g. Direct contact is a personal
telephone call or visit with legislators, their
staffs, or government officials.
Line 1h. Rallies, demonstrations,
seminars, conventions, speeches, and
lectures are examples of public forums
conducted directly by the organization or
paid for out of the organization's funds.
Line 1i. Answer “Yes” if the organization
engaged in any other activities to influence
legislation.
Line 2a. Answer “Yes” if a section 501(c)
(3) organization ceased to be described
as a section 501(c)(3) organization
because the amount on line 1j was
substantial.
Line 2b. Enter the amount of taxes, if
any, imposed on the organization itself
under section 4912, unless abated.

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

-5-

Line 2c. Enter the amount of taxes, if any,
imposed on the organization managers
under section 4912, unless abated.
Line 2d. If the filing organization reported
a section 4912 tax on a Form 4720 for this
year, answer “Yes.”

Part III. Section 6033(e)
Notice and Reporting
Requirements and Proxy
Tax

Only certain organizations that are
tax-exempt under:
• Section 501(c)(4) (social welfare
organizations),
• Section 501(c)(5) (agricultural and
horticultural organizations), or
• Section 501(c)(6) (business leagues),
are subject to the section 6033(e) notice
and reporting requirements, and to a
potential proxy tax. These organizations
must report their total lobbying expenses,
political expenses, and membership dues,
or similar amounts.
Section 6033(e) requires certain
section 501(c)(4), (5), and (6)
organizations to tell their members what
portion of their membership dues were
allocable to the political or lobbying
activities of the organization. If an
organization doesn’t give its members this
information, then the organization is
subject to a proxy tax. This tax is reported
on Form 990-T.

Part III-A
Line 1. Answer “Yes” if any of the
following exemptions from the reporting
and notice requirements apply. By doing
so, the organization is declaring that
substantially all of its membership dues
were nondeductible.
1. Local associations of employees'
and veterans' organizations described in
section 501(c)(4), but not section 501(c)
(4) social welfare organizations.
2. Labor unions and other labor
organizations described in section 501(c)
(5), but not section 501(c)(5) agricultural
and horticultural organizations.
3. Section 501(c)(4), section 501(c)
(5), and section 501(c)(6) organizations
that receive more than 90% of their dues
from:
a. Organizations exempt from tax
under section 501(a), other than section
501(c)(4), section 501(c)(5), and section
501(c)(6) organizations,
b. State or local governments,
c. Entities whose income is excluded
from gross income under section 115, or
d. Organizations described in 1 or 2,
earlier.

4. Section 501(c)(4) and section
501(c)(5) organizations that receive more
than 90% of their annual dues from:
a. Persons,
b. Families, or
c. Entities,
who each paid annual dues of $169 or
less in 2019 (adjusted annually for
inflation). See Rev. Proc. 2018-57;
2018-49 I.R.B. 827, section 3.33, available
at www.irs.gov/IRB2018-49, (or latest
annual update).
5. Any organization that receives a
private letter ruling from the IRS stating
that the organization satisfies the section
6033(e)(3) exception.
6. Any organization that keeps
records to substantiate that 90% or more
of its members can’t deduct their dues (or
similar amounts) as business expenses
whether or not any part of their dues are
used for lobbying purposes.
7. Any organization that isn’t a
membership organization.
Special rules treat affiliated social
welfare organizations, agricultural
CAUTION and horticultural organizations,
and business leagues as parts of a single
organization for purposes of meeting the
nondeductible dues exception. See Rev.
Proc. 98-19, 1998-1 C.B. 547, section
5.03, as adjusted annually.

!

Line 2. Answer “Yes” on line 2 if the
organization satisfies the following criteria
of the $2,000 in-house lobbying exception.
1. The organization didn’t make any
political expenditures or foreign lobbying
expenditures during the 2019 reporting
year.
2. The organization made lobbying
expenditures during the 2019 reporting
year consisting of only in-house direct
lobbying expenditures totaling $2,000 or
less, but excluding any allocable overhead
expenses.
If the organization's in-house direct
lobbying expenditures during the 2019
reporting year were $2,000 or less, but the
organization also paid or incurred other
lobbying or political expenditures during
the 2019 reporting year, it should answer
“No” to question 2. If the organization is
required to complete Part III-B, the $2,000
or less of in-house direct lobbying
expenditures shouldn’t be included in the
total of Part III-B, line 2a.
Line 3. Answer “Yes” on line 3 if the
organization on its prior year report agreed
to carryover an amount to be included in
the current year's reasonable estimate of
lobbying and political expenses.
Complete only Part III-B if the
organization answered “No” on both line 1

and line 2 or if the organization answered
“Yes” on line 3.

Part III-B. Dues Notices,
Reporting Requirements,
and Proxy Tax
Dues notices. An organization that
checked “No” for both Part III-A, lines 1
and 2, and is thus responsible for
completing Part III-B, must send dues
notices to its members at the time of
assessment or payment of dues, unless
the organization chooses to pay the proxy
tax instead of informing its members of the
nondeductible portion of its dues. These
dues notices must reasonably estimate
the dues allocable to the nondeductible
lobbying and political expenditures
reported in Part III-B, line 2a. An
organization that checked “Yes” for Part
III-A, line 3, and thus is required to
complete Part III-B, must send dues
notices to its members at the time of
assessment or payment of dues and
include the amount it agreed to carryover
in its reasonable estimate of the dues
allocable to the nondeductible lobbying
and political expenditures reported in Part
III-B, line 2a.

Dues, Lobbying, and Political
Expenses
IF ...

THEN ...

The organization's
lobbying and political
expenses are more
than its membership
dues for the year,

The organization must:
(a) Allocate all
membership dues to its
lobbying and political
activities, and (b) Carry
forward any excess
lobbying and political
expenses to the next
tax year.

The organization:
(a) Had only de minimis
in-house expenses
($2,000 or less) and no
other nondeductible
lobbying or political
expenses (including
any amount it agreed to
carryover); or
(b) Paid a proxy tax,
instead of notifying its
members on the
allocation of dues to
lobbying and political
expenses; or
(c) Established that
substantially all of its
membership dues, etc.,
aren’t deductible by
members.

The organization need
not disclose to its
membership the
allocation of dues, etc.,
to its lobbying and
political activities.

Members of the organization can’t take
a trade or business expense deduction on
their tax returns for the portion of their
dues, etc., allocable to the organization's
lobbying and political activities.
-6-

Proxy Tax
IF ...

THEN ...

The organization's
actual lobbying and
political expenses are
more than it estimated
in its dues notices,

The organization is
liable for a proxy tax on
the excess.

The organization:
(a) Elects to pay the
proxy tax, and
(b) Chooses not to give
its members a notice
allocating dues to
lobbying and political
campaign activities,

All the members' dues
remain eligible for a
section 162 trade or
business expense
deduction.

The organization:
The IRS may permit a
(a) Makes a reasonable waiver of the proxy tax.
estimate of dues
allocable to
nondeductible lobbying
and political activities,
and
(b) Agrees to adjust its
estimate in the following
year*.
*A facts and circumstances test determines whether or
not a reasonable estimate was made in good faith.

Allocation of costs to lobbying activities and influencing legislation. An
organization that is subject to the lobbying
disclosure rules of section 6033(e) must
use a reasonable allocation method to
determine total costs of its direct lobbying
activities; that is, costs to influence:
• Legislation, and
• The actions of a covered executive
branch official through direct
communication (for example, President,
Vice-President, or cabinet-level officials,
and their immediate deputies) (section
162(e)(1)(A) and section 162(e)(1)(D)).
Reasonable methods of allocating
costs to direct lobbying activities include,
but aren’t limited to:
• The ratio method,
• The gross-up and alternative gross-up
methods, and
• A method applying the principles of
section 263A.
For more information, see Regulations
sections 1.162-28 and 1.162-29. The
special rules and definitions for these
allocation methods are discussed under
Special Rules, later.
An organization that is subject to the
lobbying disclosure rules of section
6033(e) must also determine its total costs
of:
• De minimis in-house lobbying,
• Grassroots lobbying, and
• Political campaign activities.
There are no special rules related to
determining these costs.

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

All methods. For all the allocation
methods, include labor hours and costs of
personnel whose activities involve
significant judgment about lobbying
activities.

Special Rules
Ratio and gross-up methods. These
methods may be used even if volunteers
conduct activities.
Ratio method. This method may
disregard labor hours and cost of clerical
or support personnel (other than lobbying
personnel).
Alternative gross-up method. This
method may disregard:
• Labor hours, and
• Costs of clerical or support personnel
(other than lobbying personnel).
Third-party costs. These are:
• Payments to outside parties for
conducting lobbying activities,
• Dues paid to another membership
organization that were declared to be
nondeductible lobbying expenses, and
• Travel and entertainment costs for
lobbying activity.
Direct contact lobbying. Treat all hours
spent by a person in connection with
direct contact lobbying as labor hours
allocable to lobbying activities.
Don’t treat as direct contact lobbying
the hours spent by a person who engages
in research and other background
activities related to direct contact lobbying,
but who makes no direct contact with a
legislator, or covered executive branch
official.
De minimis rule. If less than 5% of a
person's time is spent on lobbying
activities, and there is no direct contact
lobbying, an organization may treat that
person's time spent on lobbying activities
as zero.
Purpose for engaging in an activity.
The purpose for engaging in an activity is
based on all the facts and circumstances.
If an organization's lobbying
communication was for both a lobbying
and a non-lobbying purpose, the
organization must make a reasonable
allocation of cost to influence legislation.
Correction of prior year lobbying
costs. If in a prior year, an organization
treated costs incurred for a future lobbying
communication as a lobbying cost to
influence legislation, but after the
organization filed a timely return, it
appears the lobbying communication will
not be made under any foreseeable
circumstance, the organization may apply
these costs to reduce its current year's
lobbying costs, but not below zero. The
organization may carry forward any
amount of the costs not used to reduce its

current year's lobbying costs to
subsequent years.
Example 1. Ratio method.
X Organization incurred:
1. 6,000 labor hours for all activities,
2. 3,000 labor hours for lobbying
activities (3 employees),
3. $300,000 for operational costs, and
4. No third-party lobbying costs.
X Organization allocated its lobbying
costs as follows:
Total costs
of
operations

Lobbying
labor hrs.
3,000
6,000

Allocable
thirdparty
costs

×

$300,000 +

$ -0-

Costs
allocable to
lobbying
activities
=

$150,000

Total labor
hrs.

Example 2. Gross-up method and
alternative gross-up method.
A and B are employees of Y Organization.
1. A's activities involve significant
judgment about lobbying activities.
2. A's basic lobbying labor costs
(excluding employee benefits) are
$50,000.
3. B performs clerical and support
activities for A.
4. B's labor costs (excluding
employee benefits) in support of A's
activities are $15,000.
5. Allocable third-party costs are
$100,000.
If Y Organization uses the gross-up
method to allocate its lobbying costs, it
multiplies 175% times its basic labor costs
(excluding employee benefits) for all of the
lobbying of its personnel and adds its
allocable third-party lobbying costs as
follows:

Basic lobbying
labor costs of A
+B
(175% ×
$65,000)

Costs
allocable
to
lobbying
activities

Allocable
third-party
costs
+

$100,000

=

$213,750

If Y Organization uses the alternative
gross-up method to allocate its lobbying
costs, it multiplies 225% times its basic
labor costs (excluding employee benefits)
for all of the lobbying hours of its lobbying
personnel and adds its third-party
lobbying costs as follows:

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

-7-

Basic lobbying
labor costs
of A
(225% ×
$50,000)

Allocable
third-party
costs
+

$100,000

Costs
allocable to
lobbying
activities
= $212,500

Section 263A cost allocation method.
The examples that demonstrate this
method are found in Regulations section
1.162-28(f).
Part III-B, Line 1. Enter the total dues,
assessments, and similar amounts
allocable to the 2019 reporting year. Dues
are the amounts the organization requires
a member to pay in order to be recognized
as a member.
Payments that are similar to dues
include:
1. Members' voluntary payments,
2. Assessments to cover basic
operating costs, and
3. Special assessments to conduct
lobbying and political activities.
Line 2. Include on line 2a the total
amount of expenses paid or incurred
during the 2019 reporting year in
connection with:
1. Influencing legislation;
2. Participating or intervening in any
political campaign on behalf of (or in
opposition to) any candidate for any public
office;
3. Attempting to influence any
segment of the general public with respect
to elections, legislative matters, or
referendums; and
4. Communicating directly with a
covered executive branch official in an
attempt to influence the official actions or
positions of such official.
Don’t include:
1. In-house direct lobbying
expenditures, if the total of such
expenditures is $2,000 or less (excluding
allocable overhead); or
2. Political expenditures for which the
section 527(f) tax has been paid (on Form
1120-POL).
Reduce the current year's lobbying
expenditures, but not below zero, by costs
previously allocated in a prior year to
lobbying activities that were cancelled
after a return reporting those costs was
filed.
Carryforward any amounts not used as
a reduction to subsequent years.
Include the following on line 2b.
1. Lobbying and political expenditures
carried over from the preceding tax year.
2. An amount equal to the taxable
lobbying and political expenditures

reported on Part III-B, line 5 for the
preceding tax year, if the organization
received a waiver of the proxy tax
imposed on that amount.
Line 3. Enter the total amount of dues,
assessments, and similar amounts
received, for which members were timely
notified of the nondeductibility under
section 162(e) that were allocable to the
2019 reporting year.
Example.
• Membership dues: $100,000 for the
2019 reporting year,
• Organization's timely notices to
members: 25% of membership dues
nondeductible, and
• Line 3 entry: $25,000.
Line 4. If the amount on line 2c exceeds
the amount on line 3 and the organization
sent dues notices to its members at the
time of assessment or payment of dues,
include the amount on line 4 that the
organization agrees to carryover to the
reasonable estimate of nondeductible
lobbying and political expenditure next
year and include the amount on the 2019
Schedule C (Form 990 or 990-EZ), in Part
III-B, line 2b (carryover lobbying and
political expenses), or its equivalent.
If the organization didn’t send notices
to its members, enter “-0-” on line 4.
Line 5. The taxable amount reportable on
line 5 is the amount of dues, assessments,
and similar amounts received:
1. Allocable to the 2019 reporting
year, and
2. Attributable to lobbying and political
expenditures that the organization didn’t
timely notify its members were
nondeductible.
Report the tax on Form 990-T.
If the amount on line 1 (dues,
assessments, and similar amounts) is
greater than the amount on line 2c (total
lobbying and political expenditures), then
subtract the nondeductible dues shown in
notices (line 3) and the carryover amount
(line 4) from the total lobbying and political
expenditures (line 2c) to determine the
taxable amount of lobbying and political
expenditures (line 5).
If the amount on line 1 (dues,
assessments, and similar amounts) is less
than the amount on line 2c (total lobbying
and political expenditures), then subtract
the nondeductible dues shown in notices
(line 3) and the carryover amount (line 4)
from dues, assessments, and similar
amounts (line 1) to determine the taxable
lobbying and political expenditures
(line 5).
Subtract dues, assessments, and
similar amounts (line 1) from lobbying and
political expenditures (line 2c) to
determine the excess amount to be

carried over to the following tax year and
reported on Part III-B, line 2b (carryover
lobbying and political expenditures), or its
equivalent, on the next year Schedule C
(Form 990 or 990-EZ) along with the
amounts the organization agreed to
carryover on line 4.
Underreporting of lobbying expenses.
An organization is subject to the proxy tax
for the 2019 reporting year for
underreported lobbying and political
expenses only to the extent that these
expenses (if actually reported) would have
resulted in a proxy tax liability for that year.
A waiver of proxy tax for the tax year
applies to reported expenditures only.
An organization that underreports its
lobbying and political expenses is also
subject to the section 6652(c) daily
penalty for filing an incomplete or
inaccurate return. See Instructions for
Form 990 General Instructions H.
Failure-to-File Penalties, and Instructions
for Form 990-EZ General Instructions G.
Failure-to-File Penalties.
Examples. Organizations A, B, and C:
1. Reported on the calendar year
basis,
2. Incurred only grassroots lobbying
expenses (didn't qualify for the under
$2,000 in-house lobbying exception (de
minimis rule)), and
3. Allocated dues to the tax year in
which they were received.
Organization A. Dues, assessments,
and similar amounts received in 2019
were greater than its lobbying expenses
for 2019.

Workpapers (for 2019 Form
990) — Organization A
1. Total dues, assessments,
etc., received
2. Lobbying expenses paid or
incurred
3. Less: Total nondeductible
amount of dues notices
4. Subtract line 3 from both
lines 1 and 2
5. Taxable amount of lobbying
expenses (smaller of the two
amounts on line 4)

$800
$600
100

100

$700 $500

$500

The amounts on lines 1, 2, 3, and

TIP 5 of the workpapers were entered

on the 2019 Schedule C (Form
990 or 990-EZ), Part III-B, lines 1, 2c, 3,
and 5.

Because dues, assessments, and
similar amounts received were greater
than lobbying expenses, there is no
carryover of excess lobbying expenses to
the 2020 Schedule C (Form 990 or
990-EZ), Part III-B, line 2b.

-8-

See the instructions for Part III-B, line 5,
for the treatment of the $500.
Organization B. Dues, assessments,
and similar amounts received in 2019
were less than lobbying expenses for
2019.

Workpapers (for 2019 Form
990) — Organization B
1. Total dues, assessments,
etc., received
2. Lobbying expenses paid or
incurred
3. Less: Total nondeductible
amount of dues notices
4. Subtract line 3 from both lines
1 and 2
5. Taxable amount of lobbying
expenses (smaller of the two
amounts on line 4)

$400
$600
100

100

$300

$500

$300

The amounts on lines 1, 2, 3, and

TIP 5 of the workpapers were entered

on the 2019 Schedule C (Form
990 or 990-EZ), Part III-B, lines 1, 2c, 3,
and 5.

Because dues, assessments, and
similar amounts received were less than
lobbying expenses, excess lobbying
expenses of $200 must be carried forward
to the 2020 Schedule C (Form 990 or
990-EZ) Part III-B, line 2b (excess of $600
of lobbying expenses over $400 dues,
etc., received). The $200 will be included
along with the other lobbying and political
expenses paid or incurred in the 2020
reporting year.
See the instructions for Part III-B, line 5,
for the treatment of the $300.
Organization C. Dues, assessments,
and similar amounts received in 2019
were greater than lobbying expenses for
2019 and the organization agreed to
carryover a portion of its excess lobbying
and political expenses to the next year.

Workpapers (for 2019 Form
990) — Organization C
1. Total dues, assessments,
etc., received
2. Lobbying expenses paid or
incurred
3. Less: Total nondeductible
amount of dues notices
4. Less: Amount agreed to
carryover
5. Subtract line 3 and 4 from
both lines 1 and 2
6. Taxable amount of lobbying
expenses (smaller of the two
amounts on line 5)

$800
$600
100

100

100

100

$600

$400

$400

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

The amounts on lines 1, 2, 3, 4,

TIP and 6 of the workpapers were

entered on the 2019 Schedule C
(Form 990 or 990-EZ), Part III-B, lines 1,
2c, 3, 4, and 5.
See the instructions for Part III-B, line 5,
for the treatment of the $400.

Part IV. Supplemental
Information

Use Part IV to enter narrative information
required in Part I-A, line 1, Part I-B, line 4,
Part I-C, line 5, Part II-A, line 1 (affiliated
group list), Part II-A, lines 1 and 2, and
Part II-B, line 1. Also use Part IV to enter
other narrative explanations and
descriptions. Identify the specific part and
line number that the response supports, in
the order in which they appear on

Schedule C (Form 990 or 990-EZ). Part IV
can be duplicated if more space is
needed.
Paperwork Reduction Act Notice. We
ask for the information on this form to carry
out the Internal Revenue laws of the
United States. You are required to give us
the information. We need it to ensure that
you are complying with these laws and to
allow us to figure and collect the right
amount of tax.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records related
to a form or its instructions must be
retained as long as their contents may
become material in the administration of

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

-9-

any Internal Revenue law. Generally, tax
returns and return information are
confidential, as required by section 6103.
However, certain returns and return
information of tax exempt organizations
and trusts are subject to public disclosure
and inspection, as provided by section
6104.
The time needed to complete and file
this form will vary depending on individual
circumstances. The estimated burden for
tax exempt organizations filing this form is
approved under OMB control number
1545-0047 and is included in the
estimates shown in the instructions for
their tax exempt information return.