990 Schedule C Instructions for Schedule C (Form 990)

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2023

Instructions for Schedule C
(Form 990)

Department of the Treasury
Internal Revenue Service

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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) and its instructions, such as legislation
enacted after they were published, go to 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) is used by:
• Section 501(c) organizations, and
• Section 527 organizations.

These organizations must use Schedule C (Form 990) 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) 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) 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), 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).
See Instructions for Form 990, Appendix F, Disregarded Entities
and Joint Ventures—Inclusion of Activities and Items.
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
Sep 26, 2023

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 2023 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 2023) 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, 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.

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 Rev. Rul. 2007-41, 2007-25 I.R.B. 1421, available at

TIP IRS.gov/irb/2007-25_IRB#RR-2007-41, 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.

Cat. No. 20374L

Definitions (Part II-A)

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:

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:

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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

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));

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

2. The allocable portion of administrative expenses paid or
incurred for the earlier purposes;

e. Is a member of the legislative committee that will
consider the legislation.

3. Amounts paid or incurred to try to influence legislation,
whether or not for the purposes described in 1 earlier;

A communication described in item 4, earlier, is generally
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, 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.

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.

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.

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.
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Instructions for Schedule C (Form 990)

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.
Direct contact lobbying. This means a:

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) 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. 2023-5, 2023-1 I.R.B. 265, available at IRS.gov/pub/irsirbs/irb23-01.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.

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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:

1. Any payments to other taxpayers engaged in lobbying or
political activities as a trade or business, or
2. 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 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.

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

Instructions for Schedule C (Form 990)

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

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 2023 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.

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).

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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-.

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.

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.”

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.

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)

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.
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.”

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.

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Instructions for Schedule C (Form 990)

2023 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.

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
2023 must complete columns (a) through (e) of lines 2a through
2f except in the following situations.

Nonelecting section 501(c)(3) organizations must complete
Part II-B, columns (a) and (b), to show lobbying expenditures
paid or incurred.

1. An organization first treated as a section 501(c)(3)
organization in its tax year beginning in 2023 doesn’t have
to complete any part of lines 2a through 2f.

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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.

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 2023 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.

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 attempt 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.

4. If 2023 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 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 2023.

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 attempt to influence legislation.

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 2020, 2021, 2022, and 2023, enter the amount
from Schedule C (Form 990), Part II-A, line 1f, filed for each year.
Line 2c. For 2020, 2021, 2022, and 2023, enter the amount
from Schedule C (Form 990), Part II-A, line 1c, for each year.
Line 2d. For 2020, 2021, 2022, and 2023, enter the amount
from Schedule C (Form 990), Part II-A, line 1g, for each year.
Line 2f. For 2020, 2021, 2022, and 2023, enter the amount
from Schedule C (Form 990), Part II-A, line 1a, for each year.
Enter the total for each line in column (e).

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.
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

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.

Only certain organizations that are tax-exempt under:
• Section 501(c)(4) (social welfare organizations),
• Section 501(c)(5) (agricultural and horticultural
organizations), or

Part II-B provides a reporting format for any section 501(c)(3)
organization that engaged in lobbying activities during the
Instructions for Schedule C (Form 990)

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• Section 501(c)(6) (business leagues)

2. The organization made lobbying expenditures during the
2023 tax year consisting of only in-house direct lobbying
expenditures totaling $2,000 or less, but excluding any
allocable overhead expenses.

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.

If the organization's in-house direct lobbying expenditures
during the 2023 tax year were $2,000 or less, but the
organization also paid or incurred other lobbying or political
expenditures during the 2023 tax 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.

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, Exempt
Organization Business Income Tax Return.

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Line 3. Answer “Yes” on line 3 if the organization on its prior tax
year agreed to carry over 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-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.

Part III-B. Dues Notices, Reporting
Requirements, and Proxy Tax

1. Local associations of employees' and veterans'
organizations described in section 501(c)(4), but not section
501(c)(4) social welfare organizations.

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.

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

Dues, Lobbying, and Political Expenses

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 $132 or less in
2023 (adjusted annually for inflation). See Rev. Proc.
2022-38; 2022-45 I.R.B. 445 section 3.46, available at
IRS.gov/pub/irs-irbs/irb22-45.pdf (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 and horticultural organizations, and business
CAUTION 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.

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 carry over); or
(b) Paid a proxy tax, instead of
notifying its members of 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.

!

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 2023 tax year.
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Instructions for Schedule C (Form 990)

• Dues paid to another membership organization that were

Proxy Tax
IF ...

declared to be nondeductible lobbying expenses, and

• Travel and entertainment costs for lobbying activity.

THEN ...

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.

the organization's actual lobbying and the organization is liable for a proxy
political expenses are more than it
tax on the excess.
estimated in its dues notices,
the organization:
all the members' dues remain eligible
(a) Elects to pay the proxy tax, and
for a section 162 trade or business
(b) Chooses not to give its members a expense deduction.
notice allocating dues to lobbying and
political campaign activities,

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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.

the organization:
the IRS may permit a waiver of the
(a) Makes a reasonable estimate of
proxy tax.
dues allocable to nondeductible
lobbying and political activities, and
(b) Agrees to adjust its estimate in the
following year*,

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.

*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)).

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,

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.

2. 3,000 labor hours for lobbying activities (three employees),

3. $300,000 for operational costs, and
4. No third-party lobbying costs.

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.

X Organization allocated its lobbying costs as follows:
Lobbying labor hrs.
Total labor hrs.
3,000
6,000

There are no special rules related to determining these costs.

×

$300,000

+

$ -0-

Costs allocable to lobbying
activities
=

$150,000

Example 2. Gross-up method and alternative gross-up
method. A and B are employees of Y Organization.

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

1. A's activities involve significant judgment about lobbying
activities.

Special Rules

2. A's basic lobbying labor costs (excluding employee
benefits) are $50,000.

Ratio and gross-up methods. These methods may be used
even if volunteers conduct activities.

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.

Ratio method. This method may disregard labor hours and
cost of clerical or support personnel (other than lobbying
personnel).

5. Allocable third-party costs are $100,000.

Alternative gross-up method. This method may disregard:
• Labor hours, and
• Costs of clerical or support personnel (other than lobbying
personnel).

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:

Third-party costs. These are:
• Payments to outside parties for conducting lobbying
activities,

Instructions for Schedule C (Form 990)

Allocable
third-party
costs

Total costs
of operations

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Basic lobbying labor costs
of A + B
+

(175% × $65,000)

$100,000

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 2023 tax year.

Costs allocable
to lobbying
activities

Allocable
third-party costs
=

$213,750

Example.

• Membership dues: $100,000 for the 2023 tax year,
• Organization's timely notices to members: 25% of

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:

membership dues nondeductible, and

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

+

Allocable
third-party costs
$100,000

=

• 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 carry over to the
reasonable estimate of nondeductible lobbying and political
expenditures next year and include the amount on the 2023
Schedule C (Form 990), 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.

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).

Line 5. The taxable amount reportable on line 5 is the amount of
dues, assessments, and similar amounts received:

Part III-B, Line 1. Enter the total dues, assessments, and
similar amounts allocable to the 2023 tax 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. Allocable to the 2023 tax year, and

2. Attributable to lobbying and political expenditures that the
organization didn’t timely notify its members were
nondeductible.

1. Members' voluntary payments,

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) along with the amounts the organization
agreed to carry over on line 4.

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 2023 tax 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

Underreporting of lobbying expenses. An organization is
subject to the proxy tax for the 2023 tax 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.

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.
Carry forward 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.

Examples. Organizations A, B, and C:
1. Reported on the calendar year basis,

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.

2. Incurred only grassroots lobbying expenses (didn't qualify
for the under $2,000 in-house lobbying exception (de
minimis rule)), and
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Instructions for Schedule C (Form 990)

3. Allocated dues to the tax year in which they were received.

Because dues, assessments, and similar amounts received
were less than lobbying expenses, excess lobbying expenses of
$200 must be carried forward to the 2024 Schedule C (Form
990) 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
2024 tax 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 2023 were greater than lobbying expenses for 2023
and the organization agreed to carry over a portion of its excess
lobbying and political expenses to the next year.

Organization A. Dues, assessments, and similar amounts
received in 2023 were greater than its lobbying expenses for
2023.

Workpapers (for 2023 Form 990) — Organization
A
1.
2.
3.
4.
5.

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Total dues, assessments, etc., received
Lobbying expenses paid or incurred
Less: Total nondeductible amount of dues
notices
Subtract line 3 from both lines 1 and 2

$800

$600

100

100

$700

$500

Taxable amount of lobbying expenses (smaller
of the two amounts on line 4)

Workpapers (for 2023 Form 990) — Organization
C

$500

The amounts on lines 1, 2, 3, and 5 of the workpapers

TIP were entered on the 2023 Schedule C (Form 990), Part

1.
2.
3.

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 2024 Schedule C (Form 990),
Part III-B, line 2b.
See the instructions for Part III-B, line 5, for the treatment of
the $500.
Organization B. Dues, assessments, and similar amounts
received in 2023 were less than lobbying expenses for 2023.

4.
5.

Total dues, assessments, etc., received
Lobbying expenses paid or incurred
Less: Total nondeductible amount of dues
notices
Subtract line 3 from both lines 1 and 2

100

100

$300

$500

Taxable amount of lobbying expenses (smaller
of the two amounts on line 4)

$300

100

5.

Subtract lines 3 and 4 from both lines 1 and 2

$600

$400

6.

Taxable amount of lobbying expenses (smaller
of the two amounts on line 5)

100

$400

The amounts on lines 1, 2, 3, 4, and 6 of the workpapers
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

$400

$600

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). Part IV can be duplicated if more space is needed.

The amounts on lines 1, 2, 3, and 5 of the workpapers

TIP were entered on the 2023 Schedule C (Form 990), Part
III-B, lines 1, 2c, 3, and 5.

Instructions for Schedule C (Form 990)

100

100

$600

TIP were entered on the 2023 Schedule C (Form 990), Part

Workpapers (for 2023 Form 990) — Organization
B
1.
2.
3.

$800

4.

Total dues, assessments, etc., received
Lobbying expenses paid or incurred
Less: Total nondeductible amount of dues
notices
Less: Amount agreed to carry over

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