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More on Nonprofit Lobbying Activities

June 17, 2014

An overview of reporting requirements for organizations that engage in lobbying activities.

Earlier this year I wrote a blog about political campaigning and lobbying activities since 2014 is another important election year. This blog will discuss the federal and Rhode Island registration and reporting requirements for organizations that engage in lobbying activities.

In the spirit of greater transparency both the federal and state governments have enacted laws requiring greater disclosure of who is lobbying for what, how much they are spending and how they relate to other organizations, if at all. These lobbying registration and reporting regulations do not change or affect any of the information contained in my previous blog.

The KLR Not-for-Profit services group has also written a whitepaper on this topic with greater detail for organizations that are engaged in any amount of lobbying activity. Download the whitepaper “Federal and Rhode Island Reporting and Registration Requirements Related to Lobbying Activity ” now.

In our previous blog and whitepaper we indicated that any organization that is engaged in lobbying activity should make a safe harbor election under Section 501(h) of the Internal Revenue Code. This election is for lobbying purposes only and your organization remains tax-exempt under Section 501(c)(3) of the Code. Making this election is relatively easy and any member of our team can help.

The federal regulations for lobbyist registration and reporting are part of the Federal Lobbying Disclosure Act. Typically with federal regulations, the definitions of various lobbying related activities under the Act and under the Internal Revenue Code differ a bit. However, the Act has indicated that organizations that have made a 501(h) election have the option of using either set of definitions to determine the organization’s reporting and registration requirements. Clarity and consistency is unusual coming from the federal government, but makes us accountants happy! Therefore, in addition to all of the other reasons we have provided in other documents as to the advantages of a 501(h) election, this is yet another.

As mentioned above, in addition to the federal lobbying registration and reporting requirements, a similar registration and reporting obligation has been instituted in Rhode Island (and other states). In Rhode Island, there are actually two laws governing lobbying activity. One set of laws deals with lobbying activity and the other addresses ballot question advocacy.

The Rhode Island laws may appear very similar but the lobbying law is limited to activity relative to matters before the General Assembly or on the Governor’s desk for signature. The ballot question advocacy laws apply only to ballot questions and advocating in support or opposition of those questions.

Because of the relatively short period of time during which legislation or a ballot question comes before the legislature or the voters, all legislation contains very strict deadlines for registration. In addition, reporting is mandated generally on a monthly basis and, in some situations, even more frequently.

Of course, there are financial penalties for noncompliance so it is in your best interest to be aware of the law and be ready to comply as soon as you become active in the lobbying arena. To read more about lobbying, download our latest whitepaper “Federal and Rhode Island Reporting and Registration Requirements Related to Lobbying Activity”.

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