Restful, Inc., a § 501(c)(3) exempt organization, hires a registered lobbyist to promote its position on pending legislation. For the year, its lobbying expenses are $100,000. Restful makes the § 501(h) election. The lobbying nontaxable amount is $90,000.

a. Will the lobbying expenses result in Restful losing its exempt status?
b. Calculate the amount of any tax that Restful must pay associated with the lobbying expenses.

Question

Restful, Inc., a § 501(c)(3) exempt organization, hires a registered lobbyist to promote its position on pending legislation. For the year, its lobbying expenses are $100,000. Restful makes the § 501(h) election. The lobbying nontaxable amount is $90,000.

a. Will the lobbying expenses result in Restful losing its exempt status?
b. Calculate the amount of any tax that Restful must pay associated with the lobbying expenses.

Quizplus · Accepted Answer

The Answer of Restful, Inc., a § 501(c)(3) exempt organization, hires a registered lobbyist to promote its position on pending legislation. For the year, its lobbying expenses are $100,000. Restful makes the § 501(h) election. The lobbying nontaxable amount is $90,000.

a. Will the lobbying expenses result in Restful losing its exempt status?
b. Calculate the amount of any tax that Restful must pay associated with the lobbying expenses.