Academic journal article Journal of Accountancy

IRS Hears Comments on Lobbying Legislation

Academic journal article Journal of Accountancy

IRS Hears Comments on Lobbying Legislation

Article excerpt

The Internal Revenue Service heard testimony on proposed regulations (section 1.162-29) regarding the definition of "influencing legislation" for purposes of complying with Internal Revenue Code section 162(e), which denies deductions for certain lobbying and political expenditures.

Several testifiers said proposed regulations did not provide adequate guidance for the allocation of costs for lobbying activities involving both lobbying and nonlobbying purposes. They recommended the time period in which nonlobbying monitoring or research activities could be reclassified as nondeductible lobbying activities be reduced. Some testifiers asked that allocations of potential lobbying activities be based on a primary purpose test, not the multiple purpose test in the proposed regulations, to make it easier to comply.

Harvey L. Coustan, senior tax partner of Ernst & Young in Chicago and then chairman of the American Institute of CPAs tax executive committee, urged the IRS to delay the effective date of the proposed regulations until they are in final form "because of the complexity of the new law and because there are important differences of opinion presented on these regulations."

Frederick H. Rothman, senior partner of Loeb & Troper in New York City and chairman of the AICPA tax-exempt organizations committee, said regulations should reduce uncertainty and limit the recordkeeping burden for nonlobbying activities that the IRS may, in the future, reclassify as lobbying activities. "As proposed," said Rothman, "these rules would permit the government broad leeway to extend an inquiry back in time, placing too much of a burden on the organizations that must keep these records." Similarly, Timothy Jenkins of the Coalition for Tax Equity in Washington, D.C., said, "Taxpayers would prefer a clear cutoff rather than have to deal with the unknown indefinitely. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.