Question - Wellness, Inc., a § 501(c)(3) organization, makes lobbying expenditures of $340,000 this year. Exempt purpose expenditures were $600,000 for the first six months of the year and $950,000 for the last six months of the year.
a. Determine the Federal income tax consequences to Wellness if it does not make the § 501(h) lobbying election. Wellness, Inc. is assessed a penalty tax of $.
b. Determine the Federal income tax consequences to Wellness if it does make the § 501(h) lobbying election.
If Wellness makes the § 501(h) election, it is eligible to make lobbying expenditures on basis.
Wellness is assessed a tax on the excess lobbying expenditures and the amount of tax is $.