March 21, 1994
Deducting Lobbying Costs
Legal Times
For many years, Treasury regulations disallowed all lobbying deductions. In 1962, Congress amended the Internal Revenue Code to permit taxpayers to deduct the costs of direct communications with legislative members and staff regarding legislation of direct interest to the taxpayer in its trade or business, as well as the costs of communications about such legislation between the taxpayer and an organization to which the taxpayer belonged (generally referred to as "direct" lobbying costs). Expenses for "grass root" lobbying-efforts to influence the general public regarding legislation-and "political" activities-aimed at influencing the outcome of elections-remained non-deductible.
The Revenue Reconciliation Act of 1993, effective Jan. 1, 1994, eliminated the deductibility of most direct lobbying expenses, thereby increasing the after-tax costs of lobbying as well as imposing substantial new record-keeping and compliance burdens.
The act amended § 162(e) of the Internal Revenue Code to provide that no trade or business deduction will be allowed for the costs of "influencing legislation," which is defined as any attempt to affect legislation through a communication with any member or employee of a legislative body or any government official or employee who may participate in the formulation of legislation. Direct lobbying costs, however, remain deductible "[i]n the case of any legislation of any local council or similar governing body."
Thus, the new rules disallow deductions for the costs of direct lobbying on federal and state legislation, including attempts to influence federal or state executive-branch officials on legislative matters. For example, efforts to persuade an administration to propose or support a particular law would fall into this category. The costs of attempting to influence federal or state (and, of course, local) administrative agencies regarding such purely executive-branch actions as rulings, regulations, enforcement decisions, or audits affecting a taxpayer's business may still be deducted unless the expense is allocable to a direct communication with a covered federal executive official. Grass-roots lobbying costs and political expenditures are non-deductible at all levels.
The House-Senate conference report on the Revenue Reconciliation Act directs the Internal Revenue Service to provide guidance to distinguish lobbying from "mere monitoring of legislative activities where there is no attempt to influence the formulation or enactment of legislation." If, however, the taxpayer subsequently attempts to influence the formulation or enactment of the same "or similar' legislation, the previous monitoring costs "generally" will become retroactively non-deductible.
The act for the first time mandates that "any direct communication with a covered executive branch official in an attempt to influence the official actions or positions of such official" will be non-deductible lobbying without regard to whether the communication relates to legislation. Accordingly, direct communications to influence covered officials regarding regulations, the awarding of government contracts, or any other purely administrative or executive action are now non-deductible.
Covered executive-branch officials include the following federal officials: the president; the vice president; any officer or employee of the Executive Office of the President, and the two most senior level officers of each of the other agencies in such executive office; and individuals serving in positions in Level I of the Executive Schedule, individuals designated by the president as having Cabinet-level status, and immediate deputies of the foregoing.
Scope of Disallowance
An "anti-cascading" rule provides that taxpayers whose trade or business is the conduct of lobbying or political activities-professional lobbyists-may deduct their lobbying and political expenses. But their clients will be denied deductions for lobbyists' fees allocable to non-deductible lobbying.
A de minimis exception permits taxpayers to deduct their "in-house expenditures" for lobbying as long as those expenditures (exclusive of overhead costs) do not exceed $2,000 for the taxable year. In-house expenditures include the costs of direct lobbying and direct communications with covered executive-branch officials, but the term does not include, and the exception does not apply to, payments to professional lobbyists, trade-association dues, or other similar amounts allocable to lobbying activities.
The act broadly defines lobbying expenses to include any amount "paid or incurred for research for, or preparation, planning, or coordination of," any non-deductible lobbying and political activity. Accordingly, expenses incurred well in advance of any lobbying contact, including the costs of research and of meetings with others, like a coalition, to plan a lobbying campaign are now non-deductible.
This "preparation" rule applies to contacts with covered executive-branch officials. The conference report clarifies, however, that only expenses of preparing for direct contacts with covered officials are non-deductible. Contacts with other executive-branch officials on non-legislative matters that are preliminary to contacts with covered officials, including associated preparation costs, continue to be deductible. This distinction may be difficult to apply in cases where it is clear from the outset that ultimate approval by a covered official is required.
The conference report also expresses the intent that the IRS will "permit taxpayers to adopt reasonable methods for allocating expenses to lobbying (and related research and other background) activities in order to reduce taxpayer recordkeeping responsibilities."
Tax-Exempt Organizations
Tax-exempt organizations, other than § 501(c)(3) charitable organizations, continue to be able to engage in substantial lobbying and in at least some political activities, without losing their exemptions. Section 501(c)(3) organizations may lobby to a certain extent, but cannot engage in any political activities. Under prior law, business deductions for dues paid to an exempt organization that lobbied, like a trade association, were not affected unless the organization's grass-roots lobbying and political activities were substantial.
Trade associations are mounting a constitutional challenge to the new rules on tax deductibility of lobbying expenses. They claim that the rules are especially burdensome because the rules tax them at the highest corporate rate, regardless of income.
The act significantly tightens the rules on dues deductions. Under new § 6033(e), an exempt membership organization (other than a § 501(c)(3) organization) is now required to disclose each year to the IRS and to its members information on the portion of its dues allocable to lobbying and political activities. Such disclosure is not required, however, if the organization (1) has only de minimis in-house lobbying expenditures (defined as $2,000 of direct lobbying expenses, not including overhead; (2) elects to pay a proxy tax at the highest corporate rate (currently 35 percent) on its lobbying expenditures during the year; or (3) establishes pursuant to Treasury regulation (or other procedure) that substantially all of its dues are paid by members not entitled to deduct such dues.
In applying these rules, exempt organizations must treat all non-deductible lobbying and political expenditures as made out of dues (or other similar amounts). If such expenditures exceed the organization's dues income for the year, the excess is treated as lobbying and political expenditures in the following year.
An exempt organization subject to the disclosure rules must send to each dues payer, at the time of assessment or payment of such dues, a notice reasonably estimating the portion of the dues that will be allocable to lobbying expenditures. That portion is then non-deductible. If the organization does not provide such notice, a member's dues will not be affected by the new rules.
An underestimation of the amount allocable to lobbying will subject the exempt organization to the proxy tax unless the IRS agrees to waive the tax in return for the organization's agreement to adjust the next year's estimate. The conference report contemplates that the IRS will prescribe regulations to deal with over-estimations of lobbying expenses in notices to members. Presumably, an over-estimation should be credited against amounts otherwise reportable to members or subject to the proxy tax in future years.
Contributions to § 501(c)(3) organizations that lobby are deductible as charitable contributions unless the organization lobbies on matters of direct financial interest to the donor's trade or business and a principal purpose of the contribution was to secure a deduction for amounts that would not have been deductible if the donor had lobbied directly.
A constitutional challenge to the new rules affecting trade associations is now pending in the U.S. District Court for the District of Columbia. In American Society of Association Executives v. Bentsen, 10 trade associations seek to enjoin enforcement of the rules that they claim impose special burdens on trade associations, by taxing them at the highest corporate rate regardless of actual income, by creating an irrebuttable presumption that all lobbying costs are paid out of dues, by requiring the carry-over of excess lobbying costs, and by forcing associations to estimate their lobbying percentages in advance. Plaintiffs contend that these burdens are significantly greater than necessary to achieve the legitimate congressional objective of disallowing deductions for dues used for lobbying, and therefore associations are being penalized in violation of the First Amendment for exercising their constitutional right to lobby.
IRS Guidance
Regarding the guidance that the IRS is mandated to provide, a proposed revenue procedure and temporary/proposed regulations on the lobbying rules have been issued thus far, and a regulation project is in process. In addition, a notice issued Nov. 8, 1993, provides transition rules for exempt organizations that assessed or received dues before 1994.
The proposed revenue procedure (Announcement 94-8, I.R.B. 1994-3 (Dec. 30, 1993)) describes when tax-exempt organizations will not be subject to the notification/proxy tax provisions on the grounds that substantially all the organizations' dues are not being deducted. All organizations exempt from taxation under § 501(a) qualify for an automatic exemption, except social-welfare organizations, agricultural and horticultural organizations, and business leagues and trade associations. Thus, for example, § 501(c)(5) labor organizations, § 501(c)(7) social clubs, and § 501(c)(8) fraternal beneficiary associations are automatically exempt.
Section 501(c)(4) social-welfare organizations and § 501(c)(5) agricultural and horticultural organizations will be exempt if either (a) the largest amount of annual dues (or similar amounts) paid by any member is $50 or less or (b) greater than 90 percent of the organization's members are tax-exempt § 501(c)(3) organizations. Business leagues and trade associations under § 501(c)(6) will be exempt if more than 90 percent of their members are tax-exempt § 501(c)(3) organizations. Any organization that does not qualify for automatic exemption may request a private letter ruling seeking an exemption based on its individual circumstances.
The IRS has requested comments on this proposed revenue procedure, particularly concerning the treatment of § 501(c)(4) social-welfare organizations having annual dues or similar amounts of more than $50. Many § 501(c)(4) organizations that engage in lobbying have as members individuals who clearly are not deducting their dues. In the absence of an exemption, however, such an organization must either incur the substantial costs of notifying its members regarding the lobbying portion of their dues, or the organization must pay the proxy tax on its lobbying expenses. While most of these organizations could obtain a private letter ruling, that process can be time-consuming and expensive, including the user fee charged by the IRS to parties requesting such rulings. Section 501(c)(4) organizations therefore may be well-advised to submit comments on the proposed revenue procedure proposing some broader form of automatic waiver.
Reasonable Allocation Methods
On Dec. 27, 1993, the IRS published proposed and temporary regulations on the allocation of expenses to lobbying activities other than grass-roots lobbying and political activities. The regulations permit taxpayers to use any reasonable allocation method as long as it is applied consistently, allocates a proper amount of costs (including labor and overhead costs) to such lobbying activities, and is consistent with certain special rules. The regulations list three methods that generally will be treated as reasonable.
• Ratio method. Under the ratio method, the taxpayer first determines its "lobbying labor hours"-the hours spent by personnel during the taxable year on lobbying activities. The taxpayer multiplies its total cost of operations (excluding third-party lobbying costs) by a fraction, of which the numerator is the lobbying labor hours and the denominator total labor hours. The resulting number is then added to the taxpayer's third-party costs for lobbying activities, including amounts paid to professional lobbyists, dues allocable to lobbying, and travel and entertainment costs related to lobbying activities. This sum is the taxpayer's costs allocable to lobbying.
• Gross-up method. Under the gross-up method, the taxpayer computes basic labor costs per hour for each employee engaged in lobbying, including wages and other similar costs, but not pensions, profit sharing, employee benefits, and other similar costs, but not pensions, profit sharing, employee benefits, and other similar costs. These basic labor costs are then multiplied by each individual's lobbying labor hours. The resulting total is then multiplied by 175 percent and added to third-party lobbying costs.
• Section 263A method. Under the § 263A method, the taxpayer treats lobbying as a service department and allocates costs to that department in accordance with the § 263A rules, dealing with cost allocations generally. These allocations likely will also require a determination of the lobbying labor hours.
The regulations do contain certain simplifying assumptions. Taxpayers may treat the lobbying labor hours of secretarial, maintenance, and other similar personnel as zero for purposes of the ratio method, but not for purposes of the gross-up method. Moreover, an employee may be treated as having zero lobbying labor hours if less than 5 percent of the employee's time is spent on lobbying, except that time spent on direct-contact lobbying (including preparation time) cannot be disregarded even in the case of an employee spending less than 5 percent of his or her time on lobbying.
In addition, a meeting will not be treated as a lobbying activity unless a substantial purpose of the meeting is lobbying. A meeting with a federal or state legislator, legislative staff member, or covered executive-branch official is presumed to be lobbying, but the presumption may be rebutted. A taxpayer who merely goes to a widely attended speech by a House or Senate member, for example, need not treat the time spent at the meeting as lobbying.
Open Issues
The guidance to date is helpful, but leaves many important issues unresolved. A threshold issue that has been left for future regulations is the definition of influencing legislation. This question arises because taxpayers often provide to the public or to government officials, without taking any particular position, factual information on matters that are the subject of legislation. Such informational activities should not be viewed as "influencing" legislation or other government actions, and the regulations should so provide.
An appropriate solution might be for the regulations to adopt by analogy the definition of influencing legislation applicable to lobbying activities of § 501(c)(3) organizations. A communication with a legislator or public official would then constitute influencing legislation only if the communication (1) refers to specific legislation and (2) reflects a view on that specific legislation. A communication directed at the general public would constitute grass-roots lobbying only if it also contained a "call to action" urging the recipient to contact a legislator or other government official.
A second key issue is the treatment of monitoring costs where the taxpayer later lobbies on similar legislation. Some time limits are obviously necessary, since lobbying on a tax bill in 1998 should not make costs of monitoring similar legislation in 1995 retroactively non-deductible.
Taxpayers also clearly need guidance on the types of records required to substantiate lobbying hours. If daily time records are not required, then taxpayers should be able to allocate time on a more periodic basis, such as monthly or quarterly, perhaps using some type of survey method.
Businesses and tax-exempt organizations facing the daunting task of complying with the new lobbying expense provisions can expect substantially higher after-tax costs of lobbying as well as new record-keeping compliance burdens. Until pending litigation and other threshold issues are resolved, however, it is difficult to say how significant these burdens will prove.
The Revenue Reconciliation Act of 1993, effective Jan. 1, 1994, eliminated the deductibility of most direct lobbying expenses, thereby increasing the after-tax costs of lobbying as well as imposing substantial new record-keeping and compliance burdens.
The act amended § 162(e) of the Internal Revenue Code to provide that no trade or business deduction will be allowed for the costs of "influencing legislation," which is defined as any attempt to affect legislation through a communication with any member or employee of a legislative body or any government official or employee who may participate in the formulation of legislation. Direct lobbying costs, however, remain deductible "[i]n the case of any legislation of any local council or similar governing body."
Thus, the new rules disallow deductions for the costs of direct lobbying on federal and state legislation, including attempts to influence federal or state executive-branch officials on legislative matters. For example, efforts to persuade an administration to propose or support a particular law would fall into this category. The costs of attempting to influence federal or state (and, of course, local) administrative agencies regarding such purely executive-branch actions as rulings, regulations, enforcement decisions, or audits affecting a taxpayer's business may still be deducted unless the expense is allocable to a direct communication with a covered federal executive official. Grass-roots lobbying costs and political expenditures are non-deductible at all levels.
The House-Senate conference report on the Revenue Reconciliation Act directs the Internal Revenue Service to provide guidance to distinguish lobbying from "mere monitoring of legislative activities where there is no attempt to influence the formulation or enactment of legislation." If, however, the taxpayer subsequently attempts to influence the formulation or enactment of the same "or similar' legislation, the previous monitoring costs "generally" will become retroactively non-deductible.
The act for the first time mandates that "any direct communication with a covered executive branch official in an attempt to influence the official actions or positions of such official" will be non-deductible lobbying without regard to whether the communication relates to legislation. Accordingly, direct communications to influence covered officials regarding regulations, the awarding of government contracts, or any other purely administrative or executive action are now non-deductible.
Covered executive-branch officials include the following federal officials: the president; the vice president; any officer or employee of the Executive Office of the President, and the two most senior level officers of each of the other agencies in such executive office; and individuals serving in positions in Level I of the Executive Schedule, individuals designated by the president as having Cabinet-level status, and immediate deputies of the foregoing.
Scope of Disallowance
An "anti-cascading" rule provides that taxpayers whose trade or business is the conduct of lobbying or political activities-professional lobbyists-may deduct their lobbying and political expenses. But their clients will be denied deductions for lobbyists' fees allocable to non-deductible lobbying.
A de minimis exception permits taxpayers to deduct their "in-house expenditures" for lobbying as long as those expenditures (exclusive of overhead costs) do not exceed $2,000 for the taxable year. In-house expenditures include the costs of direct lobbying and direct communications with covered executive-branch officials, but the term does not include, and the exception does not apply to, payments to professional lobbyists, trade-association dues, or other similar amounts allocable to lobbying activities.
The act broadly defines lobbying expenses to include any amount "paid or incurred for research for, or preparation, planning, or coordination of," any non-deductible lobbying and political activity. Accordingly, expenses incurred well in advance of any lobbying contact, including the costs of research and of meetings with others, like a coalition, to plan a lobbying campaign are now non-deductible.
This "preparation" rule applies to contacts with covered executive-branch officials. The conference report clarifies, however, that only expenses of preparing for direct contacts with covered officials are non-deductible. Contacts with other executive-branch officials on non-legislative matters that are preliminary to contacts with covered officials, including associated preparation costs, continue to be deductible. This distinction may be difficult to apply in cases where it is clear from the outset that ultimate approval by a covered official is required.
The conference report also expresses the intent that the IRS will "permit taxpayers to adopt reasonable methods for allocating expenses to lobbying (and related research and other background) activities in order to reduce taxpayer recordkeeping responsibilities."
Tax-Exempt Organizations
Tax-exempt organizations, other than § 501(c)(3) charitable organizations, continue to be able to engage in substantial lobbying and in at least some political activities, without losing their exemptions. Section 501(c)(3) organizations may lobby to a certain extent, but cannot engage in any political activities. Under prior law, business deductions for dues paid to an exempt organization that lobbied, like a trade association, were not affected unless the organization's grass-roots lobbying and political activities were substantial.
Trade associations are mounting a constitutional challenge to the new rules on tax deductibility of lobbying expenses. They claim that the rules are especially burdensome because the rules tax them at the highest corporate rate, regardless of income.
The act significantly tightens the rules on dues deductions. Under new § 6033(e), an exempt membership organization (other than a § 501(c)(3) organization) is now required to disclose each year to the IRS and to its members information on the portion of its dues allocable to lobbying and political activities. Such disclosure is not required, however, if the organization (1) has only de minimis in-house lobbying expenditures (defined as $2,000 of direct lobbying expenses, not including overhead; (2) elects to pay a proxy tax at the highest corporate rate (currently 35 percent) on its lobbying expenditures during the year; or (3) establishes pursuant to Treasury regulation (or other procedure) that substantially all of its dues are paid by members not entitled to deduct such dues.
In applying these rules, exempt organizations must treat all non-deductible lobbying and political expenditures as made out of dues (or other similar amounts). If such expenditures exceed the organization's dues income for the year, the excess is treated as lobbying and political expenditures in the following year.
An exempt organization subject to the disclosure rules must send to each dues payer, at the time of assessment or payment of such dues, a notice reasonably estimating the portion of the dues that will be allocable to lobbying expenditures. That portion is then non-deductible. If the organization does not provide such notice, a member's dues will not be affected by the new rules.
An underestimation of the amount allocable to lobbying will subject the exempt organization to the proxy tax unless the IRS agrees to waive the tax in return for the organization's agreement to adjust the next year's estimate. The conference report contemplates that the IRS will prescribe regulations to deal with over-estimations of lobbying expenses in notices to members. Presumably, an over-estimation should be credited against amounts otherwise reportable to members or subject to the proxy tax in future years.
Contributions to § 501(c)(3) organizations that lobby are deductible as charitable contributions unless the organization lobbies on matters of direct financial interest to the donor's trade or business and a principal purpose of the contribution was to secure a deduction for amounts that would not have been deductible if the donor had lobbied directly.
A constitutional challenge to the new rules affecting trade associations is now pending in the U.S. District Court for the District of Columbia. In American Society of Association Executives v. Bentsen, 10 trade associations seek to enjoin enforcement of the rules that they claim impose special burdens on trade associations, by taxing them at the highest corporate rate regardless of actual income, by creating an irrebuttable presumption that all lobbying costs are paid out of dues, by requiring the carry-over of excess lobbying costs, and by forcing associations to estimate their lobbying percentages in advance. Plaintiffs contend that these burdens are significantly greater than necessary to achieve the legitimate congressional objective of disallowing deductions for dues used for lobbying, and therefore associations are being penalized in violation of the First Amendment for exercising their constitutional right to lobby.
IRS Guidance
Regarding the guidance that the IRS is mandated to provide, a proposed revenue procedure and temporary/proposed regulations on the lobbying rules have been issued thus far, and a regulation project is in process. In addition, a notice issued Nov. 8, 1993, provides transition rules for exempt organizations that assessed or received dues before 1994.
The proposed revenue procedure (Announcement 94-8, I.R.B. 1994-3 (Dec. 30, 1993)) describes when tax-exempt organizations will not be subject to the notification/proxy tax provisions on the grounds that substantially all the organizations' dues are not being deducted. All organizations exempt from taxation under § 501(a) qualify for an automatic exemption, except social-welfare organizations, agricultural and horticultural organizations, and business leagues and trade associations. Thus, for example, § 501(c)(5) labor organizations, § 501(c)(7) social clubs, and § 501(c)(8) fraternal beneficiary associations are automatically exempt.
Section 501(c)(4) social-welfare organizations and § 501(c)(5) agricultural and horticultural organizations will be exempt if either (a) the largest amount of annual dues (or similar amounts) paid by any member is $50 or less or (b) greater than 90 percent of the organization's members are tax-exempt § 501(c)(3) organizations. Business leagues and trade associations under § 501(c)(6) will be exempt if more than 90 percent of their members are tax-exempt § 501(c)(3) organizations. Any organization that does not qualify for automatic exemption may request a private letter ruling seeking an exemption based on its individual circumstances.
The IRS has requested comments on this proposed revenue procedure, particularly concerning the treatment of § 501(c)(4) social-welfare organizations having annual dues or similar amounts of more than $50. Many § 501(c)(4) organizations that engage in lobbying have as members individuals who clearly are not deducting their dues. In the absence of an exemption, however, such an organization must either incur the substantial costs of notifying its members regarding the lobbying portion of their dues, or the organization must pay the proxy tax on its lobbying expenses. While most of these organizations could obtain a private letter ruling, that process can be time-consuming and expensive, including the user fee charged by the IRS to parties requesting such rulings. Section 501(c)(4) organizations therefore may be well-advised to submit comments on the proposed revenue procedure proposing some broader form of automatic waiver.
Reasonable Allocation Methods
On Dec. 27, 1993, the IRS published proposed and temporary regulations on the allocation of expenses to lobbying activities other than grass-roots lobbying and political activities. The regulations permit taxpayers to use any reasonable allocation method as long as it is applied consistently, allocates a proper amount of costs (including labor and overhead costs) to such lobbying activities, and is consistent with certain special rules. The regulations list three methods that generally will be treated as reasonable.
• Gross-up method. Under the gross-up method, the taxpayer computes basic labor costs per hour for each employee engaged in lobbying, including wages and other similar costs, but not pensions, profit sharing, employee benefits, and other similar costs, but not pensions, profit sharing, employee benefits, and other similar costs. These basic labor costs are then multiplied by each individual's lobbying labor hours. The resulting total is then multiplied by 175 percent and added to third-party lobbying costs.
• Section 263A method. Under the § 263A method, the taxpayer treats lobbying as a service department and allocates costs to that department in accordance with the § 263A rules, dealing with cost allocations generally. These allocations likely will also require a determination of the lobbying labor hours.
The regulations do contain certain simplifying assumptions. Taxpayers may treat the lobbying labor hours of secretarial, maintenance, and other similar personnel as zero for purposes of the ratio method, but not for purposes of the gross-up method. Moreover, an employee may be treated as having zero lobbying labor hours if less than 5 percent of the employee's time is spent on lobbying, except that time spent on direct-contact lobbying (including preparation time) cannot be disregarded even in the case of an employee spending less than 5 percent of his or her time on lobbying.
In addition, a meeting will not be treated as a lobbying activity unless a substantial purpose of the meeting is lobbying. A meeting with a federal or state legislator, legislative staff member, or covered executive-branch official is presumed to be lobbying, but the presumption may be rebutted. A taxpayer who merely goes to a widely attended speech by a House or Senate member, for example, need not treat the time spent at the meeting as lobbying.
Open Issues
The guidance to date is helpful, but leaves many important issues unresolved. A threshold issue that has been left for future regulations is the definition of influencing legislation. This question arises because taxpayers often provide to the public or to government officials, without taking any particular position, factual information on matters that are the subject of legislation. Such informational activities should not be viewed as "influencing" legislation or other government actions, and the regulations should so provide.
An appropriate solution might be for the regulations to adopt by analogy the definition of influencing legislation applicable to lobbying activities of § 501(c)(3) organizations. A communication with a legislator or public official would then constitute influencing legislation only if the communication (1) refers to specific legislation and (2) reflects a view on that specific legislation. A communication directed at the general public would constitute grass-roots lobbying only if it also contained a "call to action" urging the recipient to contact a legislator or other government official.
A second key issue is the treatment of monitoring costs where the taxpayer later lobbies on similar legislation. Some time limits are obviously necessary, since lobbying on a tax bill in 1998 should not make costs of monitoring similar legislation in 1995 retroactively non-deductible.
Taxpayers also clearly need guidance on the types of records required to substantiate lobbying hours. If daily time records are not required, then taxpayers should be able to allocate time on a more periodic basis, such as monthly or quarterly, perhaps using some type of survey method.
Businesses and tax-exempt organizations facing the daunting task of complying with the new lobbying expense provisions can expect substantially higher after-tax costs of lobbying as well as new record-keeping compliance burdens. Until pending litigation and other threshold issues are resolved, however, it is difficult to say how significant these burdens will prove.
