The Internal Revenue Code (IRC), in section 6033(e), imposes reporting and notice requirements on certain tax-exempt organizations described in sections 501(c)(4), 501(c)(5), and 501(c)(6) that incur nondeductible lobbying and political expenses. Organizations that do not provide notices of amounts of membership dues allocable to nondeductible lobbying expenditures are subject to tax (commonly called a proxy tax) under IRC section 6033(e)(2) on the amount of the expenditures. An organization must report the tax on Form 990-T, Exempt Organization Business Income Tax Return (and proxy tax under section 6033(e)), at line 37.  For information on computing the tax, please see the Instructions for Form 990-T.

Additional information:

Political Campaign and Lobbying Activities of IRC 501(c)(4), (c)(5) and (c)(6) Organizations