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Department of the Treasury
Internal Revenue Service
2023

Instructions for Schedule C

(Form 990)

Political Campaign and Lobbying Activities

Section references are to the Internal Revenue Code unless Form 990, Part IV, line 4, or Form 990-EZ, Part VI, line 47, then
otherwise noted. complete the specific parts as follows.
• A section 501(c)(3) organization that elected to be subject to
Future Developments the lobbying expenditure limitations of section 501(h) by
For the latest information about developments related to filing Form 5768 and for which the election was valid and in
Schedule C (Form 990) and its instructions, such as legislation effect for its tax year beginning in the year 2023 must
enacted after they were published, go to IRS.gov/Form990. 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
General Instructions 501(h) (or has revoked such election by filing Form 5768 for
which the revocation was valid and in effect for its tax year
Note. Terms in bold are defined in the Glossary of the beginning in the year 2023) must complete Part II-B. Don’t
Instructions for Form 990. complete Part II-A.
Purpose of Schedule Part III. Section 6033(e) notice and reporting requirements
and proxy tax. Part III is completed by section 501(c)(4),
Schedule C (Form 990) is used by: section 501(c)(5), and section 501(c)(6) organizations that
• Section 501(c) organizations, and received membership dues, assessments, or similar amounts as
• Section 527 organizations. defined in Rev. Proc. 98-19, 1998-1 C.B. 547, and that answered
These organizations must use Schedule C (Form 990) to “Yes” on Form 990, Part IV, line 5, or “Yes” on Form 990-EZ,
furnish additional information on political campaign activities line 35c, regarding the proxy tax.
or lobbying activities, as those terms are defined later for the If an organization isn’t required to file Form 990 or Form
various parts of this schedule. 990-EZ but chooses to do so, it must file a complete return and
provide all of the information requested, including the required
Who Must File schedules.
An organization that answered “Yes” on Form 990, Part IV,
Checklist of Required Schedules, line 3, 4, or 5, must complete Definitions
the appropriate parts of Schedule C (Form 990) and attach Definitions in this section are applicable throughout this
Schedule C to Form 990. An organization that answered “Yes” on schedule, except where noted. The following terms are defined
Form 990-EZ, Part V, line 46, or Part VI, line 47, must complete in the Glossary.
the appropriate parts of Schedule C (Form 990) and attach • Joint venture.
Schedule C to Form 990-EZ. An organization that answered • Legislation.
"Yes" on Form 990-EZ, Part V, line 35c, because it is subject to • Lobbying activities.
the section 6033(e) notice and reporting requirements and proxy • Political campaign activities.
tax, must complete Schedule C (Form 990), Part III, and attach • Tax year.
Schedule C to Form 990-EZ. 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
If an organization has an ownership interest in a joint the scope of the tax law prohibition on campaign
venture that conducts political campaign activities or activities by section 501(c)(3) organizations.
lobbying activities, the organization must report its share of
such activity occurring in its tax year on Schedule C (Form 990). Section 527 exempt function activities. Section 527
See Instructions for Form 990, Appendix F, Disregarded Entities exempt function activities include all functions that influence or
and Joint Ventures—Inclusion of Activities and Items. attempt to influence the selection, nomination, election, or
Part I. Political campaign activities. Part I is completed by appointment of any individual to any federal, state, or local public
section 501(c) organizations and section 527 organizations that office or office in a political organization, or the election of
file Form 990 (and Form 990-EZ). If the organization answered Presidential or Vice-Presidential electors, whether or not such
“Yes” on Form 990, Part IV, line 3, or Form 990-EZ, Part V, individual or electors are selected, nominated, elected, or
line 46, then complete the specific parts as follows. appointed.
Political expenditures. Any expenditures made for political
• A section 501(c)(3) organization must complete Parts I-A campaign activities are political expenditures. An expenditure
and I-B. Don’t complete Part I-C. includes a payment, distribution, loan, advance, deposit, or gift
• A section 501(c) organization other than section 501(c)(3) of money, or anything of value. It also includes a contract,
must complete Parts I-A and I-C. Don’t complete Part I-B. promise, or agreement to make an expenditure, whether or not
• A section 527 organization that files the Form 990 or Form legally enforceable.
990-EZ must complete Part I-A. Don’t complete Parts I-B Specific legislation. Specific legislation includes (1)
and I-C. legislation that has already been introduced in a legislative body
Part II. Lobbying activities. Part II is completed by only section and (2) specific legislative proposals that an organization either
501(c)(3) organizations. If the organization answered “Yes” on supports or opposes.

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Definitions (Part II-A) Grassroots lobbying communications (grassroots
Definitions in this section are applicable to only Part II-A. lobbying expenditures). A grassroots lobbying communication
is any attempt to influence any legislation through an attempt to
Expenditure test. Under the expenditure test, there are limits affect the opinions of the general public or any part of the
both upon the amount of the organization's grassroots lobbying general public.
expenditures and upon the total amount of its direct lobbying and
grassroots lobbying expenditures. If the electing public charity A communication is generally not a grassroots lobbying
doesn’t meet this expenditure test, it will owe a section 4911 communication unless (in addition to referring to specific
excise tax on its excess lobbying expenditures. Moreover, if over legislation and reflecting a view on that legislation) it encourages
a 4-year averaging period the organization's average annual total recipients to take action about the specific legislation.
lobbying or grassroots lobbying expenditures are more than A communication encourages a recipient to take action when
150% of its dollar limits, the organization will lose its exempt it:
status.
1. States that the recipient should contact legislators;
Exempt purpose expenditures. In general, an exempt
purpose expenditure is paid or incurred by an electing public 2. States a legislator's address, phone number, or similar
charity to accomplish the organization's exempt purpose. information;
Exempt purpose expenditures include: 3. Provides a petition, tear-off postcard, or similar material for
1. The total amount paid or incurred for religious, charitable, the recipient to send to a legislator; or
scientific, literary, or educational purposes, or for the 4. Specifically identifies one or more legislators who:
prevention of cruelty to children or animals, or to foster
national or international amateur sports competition (not a. Will vote on legislation;
including providing athletic facilities or equipment, other b. Opposes the communication's view on the legislation;
than by qualified amateur sports organizations described in
section 501(j)(2)); c. Is undecided about the legislation;
2. The allocable portion of administrative expenses paid or d. Is the recipient's representative in the legislature; or
incurred for the earlier purposes; e. Is a member of the legislative committee that will
3. Amounts paid or incurred to attempt to influence legislation, consider the legislation.
whether or not for the purposes described in 1 earlier; A communication described in item 4, earlier, is generally
4. Allowance for depreciation or amortization; and grassroots lobbying only if, in addition to referring to and
reflecting a view on specific legislation, it is a communication that
5. Fundraising expenditures, except that exempt purpose can’t meet the full and fair exposition test as nonpartisan
expenditures don’t include amounts paid to or incurred for analysis, study, or research.
either the organization's separate fundraising unit or other
Exceptions to lobbying. In general, engaging in nonpartisan
organizations, if the amounts are primarily for fundraising.
analysis, study, or research and making its results available to
See Regulations section 56.4911-4(c) for a discussion of the general public or segment of members thereof, or to
excluded expenditures. governmental bodies, officials, or employees isn’t considered
Lobbying expenditures. Lobbying expenditures are either a direct lobbying communication or a grassroots lobbying
expenditures (including allocable overhead and administrative communication. Nonpartisan analysis, study, or research may
costs) paid or incurred for the purpose of attempting to influence advocate a particular position or viewpoint as long as there is a
legislation: sufficiently full and fair exposition of the pertinent facts to enable
• Through communication with any member or employee of a the public or an individual to form an independent opinion or
legislative or similar body, or with any government official or conclusion.
employee who may participate in the formulation of the A communication that responds to a governmental body's or
legislation, and committee's written request for technical advice isn’t a direct
• By attempting to affect the opinions of the general public. lobbying communication.
To determine if an organization has spent excessive amounts A communication isn’t a direct lobbying communication if the
on lobbying, the organization must know which expenditures are communication is an appearance before, or communication with,
lobbying expenditures and which aren’t lobbying expenditures. any legislative body concerning action by that body that might
An electing public charity's lobbying expenditures for a year are affect the organization's existence, its powers and duties, its
the sum of its expenditures during that year for direct lobbying tax-exempt status, or the deductibility of contributions to the
communications (direct lobbying expenditures) plus grassroots organization, as opposed to affecting merely the scope of the
lobbying communications (grassroots lobbying expenditures). organization's future activities.
Direct lobbying communications (direct lobbying Communication with members. For purposes of section
expenditures). A direct lobbying communication is any attempt 4911, expenditures for certain communications between an
to influence any legislation through communication with: organization and its members are treated more leniently than are
• A member or employee of a legislative or similar body; communications to nonmembers. Expenditures for a
• A government official or employee (other than a member or communication that refers to, and reflects a view on, specific
employee of a legislative body) who may participate in the legislation aren’t lobbying expenditures if the communication
formulation of the legislation, but if the principal purpose of satisfies the following requirements.
the communication is to influence legislation only; or
• The general public in a referendum, initiative, constitutional 1. The communication is directed to only members of the
amendment, or similar procedure. organization.
A communication with a legislator or government official will 2. The specific legislation the communication refers to, and
be treated as a direct lobbying communication if the reflects a view on, is of direct interest to the organization
communication only: and its members.
• Refers to specific legislation, and
• Reflects a view on such legislation.

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3. The communication doesn’t directly encourage the member branch official in an attempt to influence the official actions or
to engage in direct lobbying (whether individually or through positions of that official.
the organization). Covered executive branch official. Covered executive
4. The communication doesn’t directly encourage the member branch officials include the President, Vice-President, officers
to engage in grassroots lobbying (whether individually or and employees of the Executive Office of the President, the two
through the organization). senior level officers of each of the other agencies in the
Executive Office, individuals in level I positions of the Executive
Expenditures for a communication directed to only members Schedule and their immediate deputies, and individuals
that refers to, and reflects a view on, specific legislation and that designated as having Cabinet level status and their immediate
satisfies the requirements of items (1), (2), and (4), earlier (under deputies.
Grassroots lobbying communications), but doesn’t satisfy the Direct contact lobbying. This means a:
requirements of item (3), are treated as expenditures for direct
lobbying. 1. Meeting,
Expenditures for a communication directed to only members 2. Telephone conversation,
that refers to, and reflects a view on, specific legislation and 3. Letter, or
satisfies the requirements of items (1) and (2), earlier, but
doesn’t satisfy the requirements of item (4), are treated as 4. Similar means of communication that is with a:
grassroots expenditures, whether or not the communication a. Legislator, or
satisfies the requirements of item (3). See Regulations section
56.4911-5 for details. b. Covered executive branch official and that is an attempt
There are special rules regarding certain paid mass media to influence the official actions or positions of that
advertisements about highly publicized legislation; allocation of official.
mixed purpose expenditures; certain transfers treated as In-house expenditures include:
lobbying expenditures; and special rules regarding lobbying on
referenda, ballot initiatives, and similar procedures. See 1. Salaries, and
Regulations sections 56.4911-2 and 56.4911-3. 2. Other expenses of the organization's officials and staff
Affiliated groups. Members of an affiliated group are treated (including amounts paid or incurred for the planning of
as a single organization to measure lobbying expenditures. Two legislative activities).
organizations are affiliated if one is bound by the other
organization's decisions on legislative issues (control) or if In-house expenditures don’t include:
enough representatives of one belong to the other organization's 1. Any payments to other taxpayers engaged in lobbying or
governing board to cause or prevent action on legislative issues political activities as a trade or business, or
(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 2. Any dues paid to another organization that are allocable to
fee for this ruling. For information on requesting rulings, see Rev. lobbying or political activities.
Proc. 2023-5, 2023-1 I.R.B. 265, available at IRS.gov/pub/irs-
irbs/irb23-01.pdf (or latest annual update).
Members of an affiliated group measure both lobbying Specific Instructions
expenditures and permitted lobbying expenditures on the basis
of the affiliated group's tax year. If all members of the affiliated Part I-A. Political Activity of Exempt
group have the same tax year, that year is the tax year of the Organizations
affiliated group. However, if the affiliated group's members have
different tax years, the tax year of the affiliated group is the Note. Section 501(c) organizations other than those exempt
calendar year, unless all the members of the group elect under section 501(c)(3) may establish section 527(f)(3) separate
otherwise. See Regulations section 56.4911-7(e)(3). segregated funds to engage in political activity. Separate
Limited control. Two organizations that are affiliated segregated funds are subject to their own filing requirements. A
because their governing instruments provide that the decisions section 501(c) organization that engages a separate segregated
of one will control the other on only national legislation are fund to conduct political activity should report transfers to the
subject to the following provisions. fund in Parts I-A and I-C. The separate segregated fund should
• The controlling organization is charged with its own lobbying report specific activities on its own Form 990 if the fund is
expenditures and the national legislation expenditures of the required to file.
affiliated organizations,
• The controlling organization isn’t charged with other Line 1. Section 501(c) organizations should provide a detailed
lobbying expenditures (or other exempt-purpose description of their direct and indirect political campaign
expenditures) of the affiliated organizations, and activities in Part IV. If the section 501(c) organization collects
• Each local organization is treated as though it were not a political contributions or member dues earmarked for a separate
member of an affiliated group. For example, the local segregated fund, and promptly and directly transfers them to that
organization should account for its own expenditures only fund as prescribed in Regulations section 1.527-6(e), don’t
and not for any of the national legislation expenditures report them here. Such amounts should be reported in Part I-C,
deemed as incurred by the controlling organization. line 5e.
Section 527 organizations should provide a detailed
Definitions (Part III) description of their exempt function activities in Part IV.
Definitions in this section are applicable to only Part III. Line 2. Enter the total amount that the filing organization has
Lobbying and political expenditures. For purposes of this spent conducting the activities described on line 1.
section only, lobbying and political expenditures don’t include
any political campaign expenditures for which the tax under Line 3. If the organization used volunteer labor for its political
section 527(f) was paid (see Part I-C). They do include any campaign activities or section 527 exempt function activities,
expenditures for communications with a covered executive provide the total number of hours. Any reasonable method may
be used to estimate this amount.
Instructions for Schedule C (Form 990) -3-

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Part I-B. Section 501(c)(3) Part II-A. Lobbying Activity
Organizations— Disclosure of Excise Only section 501(c)(3) organizations that have filed Form 5768
(election under section 501(h)) complete this section.
Taxes Imposed Under Section 4955
Section 501(c)(3) organizations must disclose any excise tax Part II-A provides a reporting format for any section 501(c)(3)
incurred during the year under section 4955 (political organization for which the 501(h) lobbying expenditure election
expenditures), unless abated. See sections 4962 and 6033(b). was valid and in effect during the 2023 tax year, whether or not
the organization engaged in lobbying activities during that tax
Line 1. Enter the amount of taxes incurred by the organization year. A public charity that makes a valid section 501(h) election
itself under section 4955, unless abated. If no tax was incurred, may spend up to a certain percentage of its exempt purpose
enter -0-. expenditures to influence legislation without incurring tax or
Line 2. Enter the amount of taxes incurred by the organization losing its tax exempt status.
managers under section 4955, unless abated. If no tax was Affiliated groups. If the filing organization belongs to an
incurred, enter -0-. affiliated group, check Part II-A, box A, and complete lines 1a
Line 3. If the filing organization reported a section 4955 tax on a through 1i.
Form 4720, Return of Certain Excise Taxes Under Chapters 41 • Complete column (a) for the electing member of the group.
and 42 of the Internal Revenue Code, for the tax year, answer • Complete column (b) for the affiliated group as a whole.
“Yes.” If the filing organization checked box A and the limited control
provisions apply to the organizations in the affiliated group, each
Line 4. Describe in Part IV the steps taken by the organization member of the affiliated group should check box B and complete
to correct the activity that subjected it to the section 4955 tax. only column (a).
Correction of a political expenditure means recovering the
expenditure to the extent possible and establishing safeguards If the filing organization doesn’t check box A, don’t check box
to prevent future political expenditures. Recovery of the B.
expenditure means recovering part or all of the expenditure to Affiliated group list. Provide in Part IV a list showing each
the extent possible, and, where full recovery can’t be affiliated group member's name, address, EIN, and expenses.
accomplished, by any additional corrective action that is Show which members made the election under section 501(h)
necessary. (The organization that made the political expenditure and which didn’t.
isn’t under any obligation to attempt to recover the expenditure Include each electing member's share of the excess lobbying
by legal action if the action would in all probability not result in expenditures on the list.
the satisfaction of, or execution on, a judgment.) Nonelecting members don’t owe tax, but remain subject to
the general rule, which provides that no substantial part of their
Part I-C. Section 527 Exempt Function activities may consist of carrying on propaganda or otherwise
Activity of Section 501(c) attempting to influence legislation.
Organizations Other Than Section Lines 1a through 1i. Complete lines 1a through 1i in column
(a) for any organization required to complete Part II-A, but
501(c)(3) complete column (b) for only affiliated groups.
Lines 1a through 1i are used to determine whether any of the
Note. Section 501(c) organizations that collect political organization's current year lobbying expenditures are subject to
contributions or member dues earmarked for a separate tax under section 4911. File Form 4720 if the organization needs
segregated fund, and promptly and directly transfer them to that to report and pay the excise tax.
fund as prescribed in Regulations section 1.527-6(e), don’t Line 1a. Enter the amount the organization expended for
report them on lines 1 or 2. Such amounts are reported on grassroots lobbying communications. See Regulations section
line 5e. 56.4911-6(b).
Line 1. Enter the amount of the organization's funds that it Line 1b. Enter the amount the organization expended for
expended for section 527 exempt function activities. See direct lobbying communications. See Regulations section
Regulations section 1.527-6(b). 56.4911-6(b).
Line 2. Enter the amount of the organization's funds that it Line 1c. Add lines 1a and 1b.
transferred to other organizations, including a separate Line 1d. Enter all other amounts (excluding lobbying) the
segregated section 527(f)(3) fund created by the organization, organization expended to accomplish its exempt purpose.
for section 527 exempt function activity. Line 1e. Add lines 1c and 1d. This is the organization's total
exempt purpose expenditures.
Line 3. Total exempt function expenditures. Add lines 1 and 2 Lines 1h and 1i. If there are no excess lobbying expenditures
and enter on line 3 and on Form 1120-POL, line 17b. on either line 1h or 1i of column (b), treat each electing member
Line 4. If the filing organization reported taxable political of the affiliated group as having no excess lobbying
expenditures on Form 1120-POL for this year, answer “Yes.” expenditures. However, if there are excess lobbying
expenditures on either line 1h or 1i of column (b), treat each
Line 5. In columns (a), (b), and (c), enter the name, address electing member as having excess lobbying expenditures. In
and employer identification number (EIN) of each section 527 such case, each electing member must file Form 4720, and must
political organization to which payments were made. In column pay the tax on its proportionate share of the affiliated group's
(d), enter the amount paid from the filing organization's funds. In excess lobbying expenditures. Enter the proportionate share in
column (e), enter the amount of political contributions received column (a) on line 1h or line 1i, or on both lines. In Part IV,
and promptly and directly delivered to a separate political provide the affiliated group list described earlier. Show what
organization, such as a separate segregated fund or a political amounts apply to each group member. To find a member's
action committee (PAC). If additional space is needed, enter proportionate share, see Regulations section 56.4911-8(d).
information in Part IV. Line 1j. If the filing organization reported section 4911 tax on
Form 4720 for this year, answer “Yes.”

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Line 2. Line 2 is used to determine if the organization exceeded 2023 tax year but didn’t make a section 501(h) lobbying
lobbying expenditure limits during the 4-year averaging period. expenditure election for that year by filing Form 5768. The
distinction in Part II-A between direct and grassroots lobbying
Any organization for which a lobbying expenditure election activities by organizations that made the section 501(h) election
under section 501(h) was in effect for its tax year beginning in doesn’t apply to organizations that complete Part II-B.
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
1. An organization first treated as a section 501(c)(3) paid or incurred.
organization in its tax year beginning in 2023 doesn’t have
to complete any part of lines 2a through 2f. Note. A nonelecting organization will generally be regarded as
2. An organization doesn’t have to complete lines 2a through engaging in lobbying activity if the organization either contacts,
2f for any period before it is first treated as a section 501(c) or urges the public to contact, members of a legislative body for
(3) organization. the purpose of proposing, supporting, or opposing legislation or
the government's budget process; or advocates the adoption or
3. If 2023 is the first year for which an organization's section rejection of legislation.
501(h) election is effective, that organization must complete
line 2a, columns (d) and (e). The organization must then Organizations should answer “Yes” or “No” in column (a) to
complete all of column (e) to determine whether the amount questions 1a through 1i and provide in Part IV a detailed
on line 2c, column (e), is equal to or less than the lobbying description of any activities the organization engaged in (through
ceiling amount calculated on line 2b and whether the its employees or volunteers) to attempt to influence legislation.
amount on line 2f is equal to or less than the grassroots The description should include all lobbying activities, whether
ceiling amount calculated on line 2e. The organization expenses were incurred or not. Examples of such lobbying
doesn’t satisfy both tests if either its total lobbying activities include:
expenditures or grassroots lobbying expenditures exceed • Sending letters or publications to government officials or
the applicable ceiling amounts. When this occurs, all five legislators;
columns must be completed and a re-computation made • Meeting with or calling government officials or legislators;
unless exception 1 or 2 earlier applies. • Sending or distributing letters or publications (including
newsletters, brochures, etc.) to members or to the general
4. If 2023 is the second or third tax year for which the public; or
organization's first section 501(h) election is in effect, that • Using direct mail, placing advertisements, issuing press
organization is required to complete only the columns for releases, holding news conferences, or holding rallies or
the years in which the election has been in effect, entering demonstrations.
the totals for those years in column (e). The organization
must determine, for those 2 or 3 years, whether the amount For lines 1c through 1i, enter in column (b) the lobbying
entered in column (e), line 2c, is equal to or less than the expenditures paid or incurred. Enter total expenditures on
lobbying ceiling amount reported on line 2b, and whether column (b), line 1j.
the amount entered in column (e), line 2f, is equal to or less Line 1f. Grants to other organizations are amounts from the
than the grassroots ceiling amount calculated on line 2e. organization's funds given to another organization for the
The organization doesn’t satisfy both tests if either its total purpose of assisting the other organization conducting lobbying
lobbying expenditures or grassroots lobbying expenditures activities.
exceed applicable ceiling amounts. When that occurs, all
five columns must be completed and a re-computation Line 1g. Direct contact is a personal telephone call or visit with
made, unless exception 1 or 2, earlier, applies. If the legislators, their staffs, or government officials.
organization isn’t required to complete all five columns, Line 1h. Rallies, demonstrations, seminars, conventions,
provide a statement explaining why in Part IV. In the speeches, and lectures are examples of public forums
statement, show the ending date of the tax year in which the conducted directly by the organization or paid for out of the
organization made its first section 501(h) election and state organization's funds.
whether or not that first election was revoked before the
start of the organization's tax year that began in 2023. 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 Line 2a. Answer “Yes” if a section 501(c)(3) organization
through 1i, when completing lines 2a, 2c, 2d, and 2f. ceased to be described as a section 501(c)(3) organization
because the amount on line 1j was substantial.
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 2b. Enter the amount of taxes, if any, imposed on the
Line 2c. For 2020, 2021, 2022, and 2023, enter the amount organization itself under section 4912, unless abated.
from Schedule C (Form 990), Part II-A, line 1c, for each year. Line 2c. Enter the amount of taxes, if any, imposed on the
Line 2d. For 2020, 2021, 2022, and 2023, enter the amount organization managers under section 4912, unless abated.
from Schedule C (Form 990), Part II-A, line 1g, for each year.
Line 2f. For 2020, 2021, 2022, and 2023, enter the amount Line 2d. If the filing organization reported a section 4912 tax on
from Schedule C (Form 990), Part II-A, line 1a, for each year. a Form 4720 for this year, answer “Yes.”

Enter the total for each line in column (e). Part III. Section 6033(e) Notice and
Part II-B. Lobbying Activity Reporting Requirements and Proxy
Only section 501(c)(3) organizations that haven’t filed Form 5768 Tax
(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),
Part II-B provides a reporting format for any section 501(c)(3) • Section 501(c)(5) (agricultural and horticultural
organization that engaged in lobbying activities during the organizations), or
Instructions for Schedule C (Form 990) -5-

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• Section 501(c)(6) (business leagues) 2. The organization made lobbying expenditures during the
are subject to the section 6033(e) notice and reporting 2023 tax year consisting of only in-house direct lobbying
requirements, and to a potential proxy tax. These organizations expenditures totaling $2,000 or less, but excluding any
must report their total lobbying expenses, political expenses, and allocable overhead expenses.
membership dues, or similar amounts. If the organization's in-house direct lobbying expenditures
Section 6033(e) requires certain section 501(c)(4), (5), and during the 2023 tax year were $2,000 or less, but the
(6) organizations to tell their members what portion of their organization also paid or incurred other lobbying or political
membership dues were allocable to the political or lobbying expenditures during the 2023 tax year, it should answer “No” to
activities of the organization. If an organization doesn’t give its question 2. If the organization is required to complete Part III-B,
members this information, then the organization is subject to a the $2,000 or less of in-house direct lobbying expenditures
proxy tax. This tax is reported on Form 990-T, Exempt shouldn’t be included in the total of Part III-B, line 2a.
Organization Business Income Tax Return. 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
Part III-A year's reasonable estimate of lobbying and political expenses.
Line 1. Answer “Yes” if any of the following exemptions from the Complete only Part III-B if the organization answered “No” on
reporting and notice requirements apply. By doing so, the both line 1 and line 2 or if the organization answered “Yes” on
organization is declaring that substantially all of its membership line 3.
dues were nondeductible.
1. Local associations of employees' and veterans' Part III-B. Dues Notices, Reporting
organizations described in section 501(c)(4), but not section Requirements, and Proxy Tax
501(c)(4) social welfare organizations.
Dues notices. An organization that checked “No” for both Part
2. Labor unions and other labor organizations described in III-A, lines 1 and 2, and is thus responsible for completing Part
section 501(c)(5), but not section 501(c)(5) agricultural and III-B, must send dues notices to its members at the time of
horticultural organizations. assessment or payment of dues, unless the organization
3. Section 501(c)(4), section 501(c)(5), and section 501(c)(6) chooses to pay the proxy tax instead of informing its members of
organizations that receive more than 90% of their dues the nondeductible portion of its dues. These dues notices must
from: reasonably estimate the dues allocable to the nondeductible
lobbying and political expenditures reported in Part III-B, line 2a.
a. Organizations exempt from tax under section 501(a), An organization that checked “Yes” for Part III-A, line 3, and thus
other than section 501(c)(4), section 501(c)(5), and is required to complete Part III-B, must send dues notices to its
section 501(c)(6) organizations; members at the time of assessment or payment of dues and
b. State or local governments; include the amount it agreed to carryover in its reasonable
estimate of the dues allocable to the nondeductible lobbying and
c. Entities whose income is excluded from gross income political expenditures reported in Part III-B, line 2a.
under section 115; or
d. Organizations described in 1 or 2, earlier. Dues, Lobbying, and Political Expenses

4. Section 501(c)(4) and section 501(c)(5) organizations that IF ... THEN ...
receive more than 90% of their annual dues from:
the organization's lobbying and the organization must:
a. Persons; political expenses are more than its (a) Allocate all membership dues to
b. Families; or membership dues for the year, its lobbying and political activities; and
(b) Carry forward any excess lobbying
c. Entities, who each paid annual dues of $132 or less in and political expenses to the next tax
2023 (adjusted annually for inflation). See Rev. Proc. year.
2022-38; 2022-45 I.R.B. 445 section 3.46, available at the organization: the organization need not disclose to
IRS.gov/pub/irs-irbs/irb22-45.pdf (or latest annual (a) Had only de minimis in-house its membership the allocation of dues,
update). expenses ($2,000 or less) and no etc., to its lobbying and political
5. Any organization that receives a private letter ruling from the other nondeductible lobbying or activities.
IRS stating that the organization satisfies the section political expenses (including any
amount it agreed to carry over); or
6033(e)(3) exception. (b) Paid a proxy tax, instead of
6. Any organization that keeps records to substantiate that notifying its members of the allocation
90% or more of its members can’t deduct their dues (or of dues to lobbying and political
similar amounts) as business expenses whether or not any expenses; or
(c) Established that substantially all of
part of their dues are used for lobbying purposes. its membership dues, etc., aren’t
7. Any organization that isn’t a membership organization. deductible by members,
Special rules treat affiliated social welfare organizations, Members of the organization can’t take a trade or business
! agricultural and horticultural organizations, and business expense deduction on their tax returns for the portion of their
CAUTION leagues as parts of a single organization for purposes of dues, etc., allocable to the organization's lobbying and political
meeting the nondeductible dues exception. See Rev. Proc. activities.
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 2023 tax year.

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Proxy Tax • Dues paid to another membership organization that were
declared to be nondeductible lobbying expenses, and
IF ... THEN ... • Travel and entertainment costs for lobbying activity.
the organization's actual lobbying and the organization is liable for a proxy Direct contact lobbying. Treat all hours spent by a person in
political expenses are more than it tax on the excess. connection with direct contact lobbying as labor hours allocable
estimated in its dues notices, to lobbying activities.
the organization: all the members' dues remain eligible Don’t treat as direct contact lobbying the hours spent by a
(a) Elects to pay the proxy tax, and for a section 162 trade or business person who engages in research and other background activities
(b) Chooses not to give its members a expense deduction. related to direct contact lobbying, but who makes no direct
notice allocating dues to lobbying and contact with a legislator, or covered executive branch official.
political campaign activities,
the organization: the IRS may permit a waiver of the De minimis rule. If less than 5% of a person's time is spent on
(a) Makes a reasonable estimate of proxy tax. lobbying activities, and there is no direct contact lobbying, an
dues allocable to nondeductible organization may treat that person's time spent on lobbying
lobbying and political activities, and activities as zero.
(b) Agrees to adjust its estimate in the Purpose for engaging in an activity. The purpose for
following year*,
engaging in an activity is based on all the facts and
*A facts and circumstances test determines whether or not a reasonable estimate was circumstances. If an organization's lobbying communication was
made in good faith. for both a lobbying and a non-lobbying purpose, the organization
must make a reasonable allocation of cost to influence
legislation.
Allocation of costs to lobbying activities and influencing Correction of prior year lobbying costs. If in a prior year, an
legislation. An organization that is subject to the lobbying organization treated costs incurred for a future lobbying
disclosure rules of section 6033(e) must use a reasonable communication as a lobbying cost to influence legislation, but
allocation method to determine total costs of its direct lobbying after the organization filed a timely return, it appears the lobbying
activities; that is, costs to influence: communication will not be made under any foreseeable
• Legislation; and circumstance, the organization may apply these costs to reduce
• The actions of a covered executive branch official through its current year's lobbying costs, but not below zero. The
direct communication (for example, President, organization may carry forward any amount of the costs not used
Vice-President, or cabinet-level officials, and their to reduce its current year's lobbying costs to subsequent years.
immediate deputies) (section 162(e)(1)(A) and section
162(e)(1)(D)). Example 1. Ratio method. X Organization incurred:
Reasonable methods of allocating costs to direct lobbying 1. 6,000 labor hours for all activities,
activities include, but aren’t limited to: 2. 3,000 labor hours for lobbying activities (three employees),
• The ratio method,
• The gross-up and alternative gross-up methods, and 3. $300,000 for operational costs, and
• A method applying the principles of section 263A.
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 X Organization allocated its lobbying costs as follows:
methods are discussed under Special Rules, later. Allocable
An organization that is subject to the lobbying disclosure rules Lobbying labor hrs. Total costs third-party Costs allocable to lobbying
Total labor hrs. of operations costs activities
of section 6033(e) must also determine its total costs of:
• De minimis in-house lobbying, 3,000 × $300,000 + $ -0- = $150,000
• Grassroots lobbying, and 6,000
• Political campaign activities.
There are no special rules related to determining these costs. Example 2. Gross-up method and alternative gross-up
All methods. For all the allocation methods, include labor hours method. A and B are employees of Y Organization.
and costs of personnel whose activities involve significant 1. A's activities involve significant judgment about lobbying
judgment about lobbying activities. 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.
Ratio method. This method may disregard labor hours and 4. B's labor costs (excluding employee benefits) in support of
cost of clerical or support personnel (other than lobbying A's activities are $15,000.
personnel). 5. Allocable third-party costs are $100,000.
Alternative gross-up method. This method may disregard: If Y Organization uses the gross-up method to allocate its
• Labor hours, and lobbying costs, it multiplies 175% times its basic labor costs
• Costs of clerical or support personnel (other than lobbying (excluding employee benefits) for all of the lobbying of its
personnel). personnel and adds its allocable third-party lobbying costs as
Third-party costs. These are: follows:
• Payments to outside parties for conducting lobbying
activities,

Instructions for Schedule C (Form 990) -7-

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Costs allocable Line 3. Enter the total amount of dues, assessments, and
Basic lobbying labor costs Allocable to lobbying similar amounts received, for which members were timely
of A + B third-party costs activities notified of the nondeductibility under section 162(e) that were
allocable to the 2023 tax year.
(175% × $65,000) + $100,000 = $213,750
Example.
• Membership dues: $100,000 for the 2023 tax year,
If Y Organization uses the alternative gross-up method to • Organization's timely notices to members: 25% of
membership dues nondeductible, and
allocate its lobbying costs, it multiplies 225% times its basic Line 3 entry: $25,000.
labor costs (excluding employee benefits) for all of the lobbying •
hours of its lobbying personnel and adds its third-party lobbying Line 4. If the amount on line 2c exceeds the amount on line 3
costs as follows: and the organization sent dues notices to its members at the
time of assessment or payment of dues, include the amount on
Basic lobbying labor Allocable Costs allocable to line 4 that the organization agrees to carry over to the
costs of A third-party costs lobbying activities
reasonable estimate of nondeductible lobbying and political
(225% × $50,000) + $100,000 = $212,500 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.
Section 263A cost allocation method. The examples that If the organization didn’t send notices to its members, enter
demonstrate this method are found in Regulations section “-0-” on line 4.
1.162-28(f).
Line 5. The taxable amount reportable on line 5 is the amount of
Part III-B, Line 1. Enter the total dues, assessments, and dues, assessments, and similar amounts received:
similar amounts allocable to the 2023 tax year. Dues are the
amounts the organization requires a member to pay in order to 1. Allocable to the 2023 tax year, and
be recognized as a member. 2. Attributable to lobbying and political expenditures that the
Payments that are similar to dues include: organization didn’t timely notify its members were
1. Members' voluntary payments, nondeductible.
2. Assessments to cover basic operating costs, and Report the tax on Form 990-T.
3. Special assessments to conduct lobbying and political If the amount on line 1 (dues, assessments, and similar
activities. amounts) is greater than the amount on line 2c (total lobbying
and political expenditures), then subtract the nondeductible dues
Line 2. Include on line 2a the total amount of expenses paid or shown in notices (line 3) and the carryover amount (line 4) from
incurred during the 2023 tax year in connection with: the total lobbying and political expenditures (line 2c) to
determine the taxable amount of lobbying and political
1. Influencing legislation; expenditures (line 5).
2. Participating or intervening in any political campaign on If the amount on line 1 (dues, assessments, and similar
behalf of (or in opposition to) any candidate for any public amounts) is less than the amount on line 2c (total lobbying and
office; political expenditures), then subtract the nondeductible dues
3. Attempting to influence any segment of the general public shown in notices (line 3) and the carryover amount (line 4) from
with respect to elections, legislative matters, or dues, assessments, and similar amounts (line 1) to determine
referendums; and the taxable lobbying and political expenditures (line 5).
Subtract dues, assessments, and similar amounts (line 1)
4. Communicating directly with a covered executive branch from lobbying and political expenditures (line 2c) to determine
official in an attempt to influence the official actions or the excess amount to be carried over to the following tax year
positions of such official. and reported on Part III-B, line 2b (carryover lobbying and
Don’t include: political expenditures), or its equivalent, on the next year
Schedule C (Form 990) along with the amounts the organization
1. In-house direct lobbying expenditures, if the total of such agreed to carry over on line 4.
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
2. Political expenditures for which the section 527(f) tax has lobbying and political expenses only to the extent that these
been paid (on Form 1120-POL). 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
Reduce the current year's lobbying expenditures, but not to reported expenditures only.
below zero, by costs previously allocated in a prior year to
lobbying activities that were cancelled after a return reporting An organization that underreports its lobbying and political
those costs was filed. expenses is also subject to the section 6652(c) daily penalty for
filing an incomplete or inaccurate return. See Instructions for
Carry forward any amounts not used as a reduction to Form 990, General Instructions H. Failure-To-File Penalties, and
subsequent years. Instructions for Form 990-EZ, General Instructions G.
Include the following on line 2b. Failure-To-File Penalties.
1. Lobbying and political expenditures carried over from the Examples. Organizations A, B, and C:
preceding tax year.
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 2. Incurred only grassroots lobbying expenses (didn't qualify
tax year, if the organization received a waiver of the proxy for the under $2,000 in-house lobbying exception (de
tax imposed on that amount. minimis rule)), and

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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
Organization A. Dues, assessments, and similar amounts $200 must be carried forward to the 2024 Schedule C (Form
received in 2023 were greater than its lobbying expenses for 990) Part III-B, line 2b (excess of $600 of lobbying expenses over
2023. $400 dues, etc., received). The $200 will be included along with
Workpapers (for 2023 Form 990) — Organization the other lobbying and political expenses paid or incurred in the
2024 tax year.
A
See the instructions for Part III-B, line 5, for the treatment of
1. Total dues, assessments, etc., received $800 the $300.
2. Lobbying expenses paid or incurred $600 Organization C. Dues, assessments, and similar amounts
3. Less: Total nondeductible amount of dues received in 2023 were greater than lobbying expenses for 2023
notices 100 100 and the organization agreed to carry over a portion of its excess
4. Subtract line 3 from both lines 1 and 2 $700 $500 lobbying and political expenses to the next year.
5. Taxable amount of lobbying expenses (smaller Workpapers (for 2023 Form 990) — Organization
of the two amounts on line 4) $500
C
The amounts on lines 1, 2, 3, and 5 of the workpapers
TIP were entered on the 2023 Schedule C (Form 990), Part 1. Total dues, assessments, etc., received $800
III-B, lines 1, 2c, 3, and 5. 2. Lobbying expenses paid or incurred $600
3. Less: Total nondeductible amount of dues
Because dues, assessments, and similar amounts received notices 100 100
were greater than lobbying expenses, there is no carryover of 4. Less: Amount agreed to carry over 100 100
excess lobbying expenses to the 2024 Schedule C (Form 990), 5. Subtract lines 3 and 4 from both lines 1 and 2 $600 $400
Part III-B, line 2b. 6. Taxable amount of lobbying expenses (smaller
See the instructions for Part III-B, line 5, for the treatment of of the two amounts on line 5) $400
the $500.
Organization B. Dues, assessments, and similar amounts The amounts on lines 1, 2, 3, 4, and 6 of the workpapers
received in 2023 were less than lobbying expenses for 2023. TIP were entered on the 2023 Schedule C (Form 990), Part
III-B, lines 1, 2c, 3, 4, and 5.
Workpapers (for 2023 Form 990) — Organization
B See the instructions for Part III-B, line 5, for the treatment of
the $400.
1. Total dues, assessments, etc., received $400
2. Lobbying expenses paid or incurred $600 Part IV. Supplemental Information
3. Less: Total nondeductible amount of dues Use Part IV to enter narrative information required in Part I-A,
notices 100 100 line 1; Part I-B, line 4; Part I-C, line 5; Part II-A, line 1 (affiliated
4. Subtract line 3 from both lines 1 and 2 $300 $500 group list); Part II-A, lines 1 and 2; and Part II-B, line 1. Also use
5. Taxable amount of lobbying expenses (smaller Part IV to enter other narrative explanations and descriptions.
of the two amounts on line 4) $300 Identify the specific part and line number that the response
supports, in the order in which they appear on Schedule C (Form
The amounts on lines 1, 2, 3, and 5 of the workpapers 990). Part IV can be duplicated if more space is needed.
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) -9-

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