IRS Reporting Requirements

A PTA operating as a 501(c)(3) may not devote more than an insubstantial part of its activities and budget to influence legislation. The “insubstantial part” is not clearly defined, but is often interpreted to be no more than 5 percent of an organization’s annual operating expenditures.

The IRS provides another option for PTAs that choose to be more active in legislative matters. PTAs may elect 501(h) status, while retaining their 501(c)(3) status, by filing IRS Form 5768, “Election/Revocation of Election by an Eligible 501(c)(3) Organization to Make Expenditures to Influence Legislation.” This single page form can be found at www.irs.gov. Prior to electing 501(h) status, PTAs are advised to see legal and taxation professional advice.

Under the 501(h) designation, the amount of allowable lobbying expenditures is more clearly defined. For an organization with annual expenditures of $500,000 or less, the allowable expenditure on lobbying activities is 20 percent of its total annual expenditures. Under the 501(h) designation, a PTA need not report volunteer lobbying activity for the purposes of tax reporting.

All PTAs with lobbying expenditures must report these on their Form 990 or 990 EZ tax returns, whether they are a 501(c)(3) or have made the 501(h) election.

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