Reg. § 56.4911-8 Excess lobbying expenditures of affiliated group.
(a) Application This section provides rules concerning the exempt purpose expenditures, lobbying expenditures, and grass roots expenditures of an affiliated group of organizations, and the application of the excise tax imposed by section on the excess lobbying expenditures of the group.
(b) Affiliated group treated as one organization Under section , an affiliated group of organizations is treated as a single organization for purposes of the tax imposed by section . For any taxable year of the affiliated group, the group's lobbying expenditures, grass roots expenditures, and exempt purpose expenditures are equal to the sum of the lobbying expenditures, grass roots expenditures, and exempt purpose expenditures, respectively, paid or incurred by each member during the taxable year of the affiliated group. The lobbying and grass roots nontaxable amounts for the affiliated group for a taxable year are determined under section (2) and (4) and and are based on the sum of the exempt purpose expenditures described in the preceding sentence. The lobbying and grass roots ceiling amounts for the affiliated group for a taxable year are calculated under and based upon the nontaxable amounts determined pursuant to the preceding sentence.
(c) Tax imposed on excess lobbying expenditures of affiliated group The excise tax under section is imposed for a taxable year of an affiliated group if the group has excess lobbying expenditures. For any taxable year of an affiliated group, the group's excess lobbying expenditures are the greater of—
(1) The amount by which the group's lobbying expenditures exceed the group's lobbying nontaxable amount, or
(2) The amount by which the group's grass roots expenditures exceed the group's grass roots nontaxable amount.
(d) Liability for tax
(1) Electing organizations As provided in this , an electing member organization is liable for all or a portion of the excise tax imposed by section on the excess lobbying expenditures of an affiliated group of organizations. An organization that is liable under this is not liable for any excise tax under section based on its own excess lobbying expenditures. A member of the affiliated group that is not an electing member organization is not liable for any portion of the excise tax that is imposed with respect to the affiliated group.
(2) Tax based on excess lobbying expenditures If the excise tax imposed by section on the excess lobbying expenditures of an affiliated group of organizations is based upon the amount described in of this section, and at least one electing member has made lobbying expenditures, each electing member organization is liable for a portion of the tax equal to the amount of the tax multiplied by a fraction, the numerator of which is the electing member organization's lobbying expenditures paid or incurred during the taxable year of the affiliated group, and the denominator of which is the sum of the lobbying expenditures of all electing member organizations in the group paid or incurred during the taxable year of the affiliated group.
(3) Tax based on excess grass roots expenditures If the excise tax imposed by section on the excess lobbying expenditures of an affiliated group of organizations is based upon the amount described in of this section, and at least one electing member has made grass roots expenditures, each electing member organization is liable for a portion of the tax equal to the amount of the tax multiplied by the fraction described in of this section, except that “grass roots expenditures” is substituted for “lobbying expenditures.”
(4) Tax based on exempt purpose expenditures If the excise tax imposed by section on the excess lobbying expenditures of an affiliated group of organizations is based upon the amount described in of this section, and if and of this section do not apply because no electing organization has made lobbying or grass roots expenditures, respectively, each electing member organization is liable for a portion of the tax equal to the amount of tax multiplied by a fraction the numerator of which is the electing member organization's exempt purpose expenditures and the denominator of which is the exempt purpose expenditures of all the electing member organizations in the affiliated group.
(5) Taxable year for which liable An electing member organization that is liable for all or a portion of the excise tax imposed by section on the excess lobbying expenditures of an affiliated group of organizations is liable for the tax as if the tax were imposed for its taxable year with which or within which ends the taxable year of the affiliated group.
(6) Organization a member of more than one affiliated group If, under this , an organization is liable for its taxable year for two or more excise taxes imposed by section on the excess lobbying expenditures of two or more affiliated groups, then the organization is liable only for the greater of the two or more taxes.
(e) Former member organization An electing member organization that ceases to be a member of an affiliated group of organizations, the taxable year of which is different from its own, must thereafter determine its liability under for the excise tax imposed by section as if its taxable year were the taxable year of the affiliated group of which it was formerly a member. An organization to which this applies that is liable for the excise tax imposed by section is liable for the tax as if the tax were imposed for its taxable year within which ends the taxable year of the affiliated group of which it was formerly a member. The Commissioner may, at the Commissioner's discretion, permit an organization to disregard the rules of this and to determine any liability under section based upon its own taxable year.