Question

• How does the IRS define what is a “political contribution” that cannot be deducted? Is the disallowance limited to outright gifts, or does it extend to less direct methods of providing funds to a candidate or party? If the latter, please explain the circumstances in which the disallowance applies to something that is not an outright gift.
• How does the IRS define what is “lobbying,” so that a taxpayer may determine what expenses are not deductible as lobbying expenses?
• Many not-for-profit organizations are engaged in lobbying, but still qualify to receive deductible charitable contributions. Does this activity affect an individual’s ability to claim a charitable deduction for contributions to an otherwise qualified organization? If so, in what circumstances, and how is the deduction affected?

Answer 1

Lets consider the question,

We cannot make a deduction made to a political party or canditure which can be treated to be as a political campaign,and also the admissions to dinners which can be brought as a advantage for any political party and also the advertising made in bulletins are not deductable under IRS.(IRS Publication 529 - Main Content).

The legal fees paid for making or participating in campaign cannot be deducted.

Lobbying Expenses are those which are paid for participation in any form of political campaign for public office can't deduct amounts paid.

Direct cash paid and any form which is used for making for political campaign is disallowed ,for achieving the public office.

LOBBYING POLICY
The Federal government, each State, and certain localities have laws requiring registration
and reporting by lobbyists and in some cases, also by the lobbyist's employer. In addition,
certain expenses for lobbying activity are not deductible as business expenses under U.S.
tax law. Lobbying activity generally includes attempts to influence the passage or defeat of
legislation. The U.S. Government and many States, however, have extended the definition
of lobbying activity to cover efforts to influence formal rule making by executive branch
agencies or other official actions of agencies, including the decision to enter into a contract
or other financial arrangement. Moreover, "grassroots" lobbying activity (where one
communicates with the public or segment of the public encouraging others to contact public
officials for the purpose of influencing the passage of legislation or a rule making) is in many
cases also considered lobbying activity. The activities described in this paragraph are
collectively referred to as “Lobbying Activities.”
To ensure that Celgene and its employees are in compliance with these laws, including
certain registration, reporting and record keeping requirements, employees must comply with
the following:
• An employee, contractor, or agent may not engage in any Lobbying Activities, as
described above, on behalf of Celgene without prior approval and coordination with the
Corporate Affairs Department and must be in full compliance with applicable Federal,
State, and local laws.
• An employee, contractor, or agent may not retain an outside consultant to provide
Lobbying Activities, services in support of Lobbying Activities, or services otherwise
related to government affairs or public policy without prior approval and coordination with
the Corporate Affairs Department.
If you are not sure whether your activities would be considered Lobbying Activities, please
contact the Corporate Affairs Department.

First, let's make it clear that political expenses of any kind are not tax deductible as business expenses or personal expenses. Now, let's look at some details about the types of political expenses that are non-deductible. The IRS covers practically everything you can think of in its mission to tell you that political and lobbying costs are never deductible.

Lobbying Expenses

Lobbying expenses - money used to influence a legislative body at the local, state, or federal level - are non-deductible.

According to the IRS (Publication 529), this includes expenses for these types of activities:

Influence legislation,

Participate, or intervene, in any political campaign for, or against, any candidate for public office,

Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or

Communicate directly with covered executive branch officials in an attempt to influence the official actions or positions of those officials.

A "covered executive branch official" includes the President, Vice President, an officer or executive of the White House, or Cabinet-level officials and their deputies.

Expenses for doing research, preparing for lobbying activities, and travel to and from these types of activities is non-deductible.

Campaign Expenses

If you or someone else in your business is running for political office, you may not deduct the expenses involved in running a political campaign as a business or personal tax deductions.

In Publication 529, the IRS also says:

You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. These include qualification and registration fees for primary elections.

Contributions to a campaign committee or a newsletter are also non-deductible.

Other Political Expenses and Contributions

Other types of political activities that are not allowed as tax deductions:

Expenses for political activities, such as campaign dinners and events for political parties or candidates
Political contributions or gifts to political candidates.
Donations to political action committees (PAC's)
The portion of dues to professional organizations that are designated for political lobbying.
Amounts you pay in union dues that are related to lobbying or political activities.

In addition, you cannot claim a charitable deduction for contributions to a group which conducts lobbying activities that have a direct effect on your business.

One Small Loophole

You might be able to take advantage of this small loophole in the "no deductions for political stuff" decree. Your business may be able to deduct up to $2,000 per year in expenses to influence local legislation (state, county, or city). But this doesn't include deductions for hiring a lobbyist to do the influencing.