26 U.S.C. § 504 | Status after organization ceases to qualify for exemption under section 501(c)(3) because of substantial lobbying or because of political activities

(a)

General rule

An organization which—

(1)

was exempt (or was determined by the Secretary to be exempt) from taxation under section 501(a) by reason of being an organization described in section 501(c)(3), and

(2)

is not an organization described in section 501(c)(3)—

(A)

by reason of carrying on propaganda, or otherwise attempting, to influence legislation, or

(B)

by reason of participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office,

shall not at any time thereafter be treated as an organization described in section 501(c)(4).

(b)

Regulations to prevent avoidance

The Secretary shall prescribe such regulations as may be necessary or appropriate to prevent the avoidance of subsection (a), including regulations relating to a direct or indirect transfer of all or part of the assets of an organization to an organization controlled (directly or indirectly) by the same person or persons who control the transferor organization.

(c)

Churches, etc.

Subsection (a) shall not apply to any organization which is a disqualified organization within the meaning of section 501(h)(5) (relating to churches, etc.) for the taxable year immediately preceding the first taxable year for which such organization is described in paragraph (2) of subsection (a).

Pub. L. 94–455, title XIII, § 1307(a)(2)Oct. 4, 197690 Stat. 1721 Pub. L. 100–203, title X, § 10711(b)(1)Dec. 22, 1987101 Stat. 1330–464(Added , , ; amended , (2)(A), , .)

Editorial Notes

Prior Provisions

Aug. 16, 1954, ch. 736 68A Stat. 168Oct. 22, 1968Pub. L. 90–630, § 6(a)82 Stat. 1330 Pub. L. 91–172, title I, § 101(j)(15)Dec. 30, 196983 Stat. 527 section 101(k)(2)(B) of Pub. L. 91–172 section 4940 of this titleA prior section 504, acts , ; , , , related to denial of exemption, prior to repeal by , , . For effective date of repeal, see , set out as an Effective Date note under .

Amendments

Pub. L. 100–203, § 10711(b)(2)(A)1987—, substituted “substantial lobbying or because of political activities” for “substantial lobbying” in section catchline.

Pub. L. 100–203, § 10711(b)(1)Subsec. (a)(2). , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “is not an organization described in section 501(c)(3) by reason of carrying on propaganda, or otherwise attempting, to influence legislation,”.

Statutory Notes and Related Subsidiaries

Effective Date of 1987 Amendment

Pub. L. 100–203Dec. 22, 1987section 10711(c) of Pub. L. 100–203 section 170 of this titleAmendment by applicable with respect to activities after , see , set out as a note under .

Construction of Amendment

Pub. L. 94–455, title XIII, § 1307(a)(3)Oct. 4, 197690 Stat. 1722

section 504 of this title“It is the intent of Congress that enactment of this section [amending section 501 and enacting ] is not to be regarded in any way as an approval or disapproval of the decision of the Court of Appeals for the Tenth Circuit in Christian Echoes National Ministry, Inc. versus United States, 470 F.2d 849 (1972), or of the reasoning in any of the opinions leading to that decision.”

, , , provided that: