26 U.S.C. § 4912 — Tax on disqualifying lobbying expenditures of certain organizations

(a) Tax on organization. If an organization covered by this section is not described in section 501(c)(3) for a taxable year^* because it made lobbying expenditures, the organization owes a tax equal to 5 percent of those expenditures for that year. The organization must pay this tax.

(b) Tax on management. If subsection (a) imposes a tax on an organization’s lobbying expenditures, a tax equal to 5 percent of those expenditures is imposed on an agreement by an organization manager to make those expenditures when the manager knows they are likely to cause the organization not to be described in section 501(c)(3). This tax does not apply if the agreement was not willful and resulted from reasonable cause. The manager who agreed to the expenditures must pay the tax.

(c) Organizations covered. (1) In general. Except as paragraph (2) provides, this section applies to an organization that was tax-exempt, or that the Secretary^* determined was tax-exempt, under section 501(a) because it was described in section 501(c)(3). (2) Exceptions. This section does not apply to an organization (A) to which a section 501(h) election applies, (B) that is a disqualified organization as defined in section 501(h)(5), or (C) that is a private foundation^*.

(d) Definitions. (1) “Lobbying expenditure” means an amount the organization paid or incurred to carry on propaganda or otherwise try to influence legislation. (2) “Organization manager” has the meaning given in section 4955(f)(2). (3) If more than one person is liable under subsection (b), all of them are jointly and individually liable for the tax under that subsection.