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26 CFR 601.105: Examination of returns and claims for refund, credit, or abatement; determination of correct tax liability. (Also sec sec 162, 501, and 6033)
Rev. Proc. 98-19
SECTION 1. PURPOSE
This Revenue Procedure provides guidance to organizations exempt from taxation under sec 501(a) of the Internal Revenue Code of 1986 on certain exceptions from the reporting and notice requirements of sec 6033(e)(1) and the tax imposed by sec 6033(e)(2). The revenue procedure updates and supersedes Rev. Proc. 95-35, 1995-2 C.B. 391, as modified by Rev. Proc. 95-35A, 1995-2 C.B. 392.
Rev. Proc. 95-35 and Rev. Proc. 9535A were issued pursuant to the Secretary's authority to relieve tax-exempt organizations from the burden of meeting the reporting and notice requirements of sec 6033(e)(1) or the tax imposed by sec 6033(e)(2) where the organization establishes to the satisfaction of the Secretary that substantially all of the dues or other similar amounts paid by persons to such organization are not deductible without regard to sec 162(e). Rev. Proc. 95-35 and Rev. Proc. 95-35A identify certain tax-exempt organizations that are treated as satisfying the requirements of sec 6033(e)(3) and are thus not subject to the reporting and notice requirements of sec 6033(e)(1) or the tax imposed by sec 6033(e)(2). Procedures for other exempt organizations to establish that they satisfy the requirements of sec 6033(e)(3) are also provided.
In light of comments submitted in response to Rev. Proc. 95-35, the Service has determined that the requirements should be modified to further relieve the burden of sec 6033(e)(1). This revenue procedure retains the requirements set out in Rev. Proc. 95-35, and Rev. Proc. 95-35A, with the modification that the amount of annual dues (or similar amounts) that may be received by organizations described in sec 4.02 without becoming subject to the requirements of sec 6033(e) is increased to $75 or less.
SEC. 2. BACKGROUND
Section 6033(e) imposes reporting and notice requirements on tax-exempt organizations (other than sec 501(c)(3) organizations) that incur lobbying and political expenditures to which sec 162(e) applies ("nondeductible lobbying expenditures"). Section 162(e) denies a deduction, otherwise allowable under sec 162(a) as an ordinary and necessary trade or business expense, for certain lobbying and political expenditures. Section 162(e)(3) denies a deduction for the dues (or other similar...