To qualify for a charitable contribution deduction, the donee exempt organization must be a qualified charitable contribution recipient (e.g., the Red Cross rather than the National Football League). Addie contributed to a qualified charitable contribution recipient whereas Leonard did not. p. 23-6 7. Engaging in § 503 prohibited transactions by Good, an exempt organization, can result in three negative tax consequences. First, part or all of the organization’s income may be subject to Federal income tax. Second, the organization may forfeit its exempt status. Finally, intermediate sanctions may be imposed on certain exempt organization insiders. p. 23-7 8. No. While certain § 501(c)(3) organizations can make a § 501(h) election which will enable them to lobby on a limited basis and the lobbying activities are objectively measured under the expenditure test of § 501(h), a church is not eligible to make such an election. A church is under the subjective test provided in § 501(c)(3). This test provides that “no substantial part” of a church‘s activities can be for lobbying. This test is a facts and circumstances determination. pp. 23-8 and 23-9
9. Organizations exempt under § 501(c)(3) generally are limited from attempting to influence legislation (lobbying activities) or from participating in political campaigns. A violation can result in the forfeiture of exempt status. However, certain § 501(c)(3) organizations can elect to have their lobbying activities measured by an ‘‘expenditure’’ test. Other § 501(c)(3) organizations who cannot make a § 501(h) election lose their tax-exempt status if a substantial part of the organization’s activities consist of lobbying [‘‘no substantial part’’ test under § 501(c)(3)].
Eligible for this election are most § 501(c)(3) organizations (educational institutions, hospitals, and medical research organizations; organizations