California State PTA and all of its constituent associations are classified as tax-exempt nonprofit associations under the federal Internal Revenue Code Section 501(c)(3). State and federal laws place certain requirements and restrictions on lobbying and election-related activities and expenditures by such associations. A PTA that participates in influencing or attempting to influence specific legislation or voter action for the passage or defeat of any ballot measure must comply with both the federal IRS regulations and California state laws and reporting requirements.
IRS Regulations: To retain its IRS tax-exempt status and continue to receive tax-deductible contributions, a PTA may not participate in any type of political campaign or other activity on behalf of or in opposition to a candidate for any public office. Nor may a PTA devote more than an insubstantial part of its volunteer activity and expenditures to influence the outcome of ballot measures and other legislation. In general, no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying). A 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status. The IRS considers a variety of factors, including the time devoted (by both compensated and volunteer workers) and the expenditures devoted by the organization to the activity, when determining whether the lobbying activity is substantial.
All PTAs with lobbying expenditures must report these on their Form 990 or 990 EZ tax returns. PTAs which engage in lobbying activities may not file an IRS 990N electronic postcard.
For more information on IRS guidance on lobbying activities and reporting requirements, go to www.irs.gov/charities-non-profits/lobbying
