New York Governor Andrew Cuomo finally signed his administration’s signature political law reform bill last week, on August 24, 2016. The bill passed out of the New York legislature earlier this year and will have a significant impact on state-level Super PACs, nonprofit organizations involved in lobbying efforts in New York, and political consultants, in
What do the campaigns of Sarah Palin, John McCain, Ted Cruz, Donald Trump, Newt Gingrich, Rand Paul, Ralph Nader, Ronald Reagan, Mike Huckabee, Barack Obama, and Mitt Romney all have in common? They have all faced claims of copyright infringement for their use of music or other works of art.
Candidates—and outside groups supporting or opposing them—often do not pay much attention to the copyright laws that apply to their activities, and sometimes use other people’s copyrighted works without obtaining the necessary licenses. For example, candidates use popular songs at rallies and campaign events and in YouTube videos and other online advertisements, without getting the required consent or license from the musician, songwriter, or performing rights societies. And sometimes they will use photographs or artwork and incorporate them into TV ads, digital ads, mailers, and emails, without obtaining, or making sure their contractors have obtained, the necessary permissions, consents, or licenses from the artists whose work they are using.
A substantial number of organizations exempt under Internal Revenue Code (Code) § 501(c)(4), and their individual officers and directors, may be subject to financial penalties if they do not file a Form 8976, Notice of Intent to Operate Under Section 501(c)(4), with the Internal Revenue Service (Service or IRS) on or before September 6, 2016.
On July 8, 2016 the IRS released a revenue procedure for implementing new statutory requirements for certain organizations that operate under section 501(c)(4) of the Internal Revenue Code. This requirement comes on the heels of the December 2015 enactment of the Protecting Americans from Tax Hikes (PATH) Act of 2015.
The recently released Revenue Procedure 2016-41 contains temporary regulations implementing the 501(c)(4) provisions of the PATH Act and describes the new Form 8976 and the related rules for filing it.
Last month, New York Governor Andrew Cuomo announced that he and legislators in the New York State Assembly had agreed on a “5 Point Ethics Reform Plan,” a sweeping proposal to create substantial changes in New York campaign finance law. The reform bill passed out of the legislature in mid-June and is expected to be signed by the governor any day.
Most of the significant changes will become effective 30 days after the governor signs the bill into law, meaning those preparing to get involved in New York state elections this fall will need to become familiar with the new requirements quickly. The changes are particularly important for entities considering making independent expenditures in those elections, as the bill creates a new definition for an “independent expenditure committee” and adds more detail to New York’s definition of “coordination.” Nonprofit organizations exempt from federal income tax under Internal Revenue Code section 501(c)(4) are also targets for further disclosure obligations under this new law. Finally, the bill includes specific registration and reporting requirements for “political consultants” – the first-ever provision of its kind in New York law – which may impact many consultants and other service providers active in the political arena.
January is always a busy month for filing lobbying and campaign finance reports. It is also a good time to think about changes for the upcoming year that might simplify filing obligations.
• State Lobbying Reports. Most states require year-end reports to be filed at some point in January. Many also require re-registration or renewal of registration for the next year. Pay attention to deadlines, and think about where you are likely to be active in 2016. Perhaps it is time to de-register or let your registration lapse if you will not be active in a particular state. Different states have different thresholds for when registration and reporting are required, so be sure to consider how what you are doing matches what is required.…
Continue Reading PAC and Lobbying Deadlines Loom Large in January—and a Chance to Get Organized
This week, the U.S. Court of Appeals for the D.C. Circuit upheld the Federal Election Campaign Act’s long-standing ban on contributions from federal government contractors to federal candidates and parties. We have followed the case since the District Court’s decision in 2012.
The ban has been in a place since 1940. Pointing to a history of federal and state corruption scandals involving government contracts, the court ruled that the ban continues to further the government’s interest in preventing quid pro quo corruption and removes political pressure on government employees. Some of the most important things about the ruling for government contractors are: …
Continue Reading Federal Appeals Court Upholds Contribution Ban on Government Contractors
Although it appears that rules governing the political activities of 501(c)(4) organizations will be some time in coming, the IRS recently provided some new insights into how 501(c)(3) organizations can – and cannot – interact with the political world. In an adverse determination publicly released earlier this month, the IRS looked closely at how a 501(c)(3) organization can engage in educational activities, like conventions and conferences, that involve candidates who may identify with a particular political party.
In general, organizations recognized as exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code cannot engage in what is called “political campaign intervention.” This requirement is absolute: as a condition of getting (c)(3) status, organizations essentially cannot be too politically partisan in nature. For tax purposes, political campaign intervention includes any communications or activities that support or oppose one or more candidates for public office. This includes the more clear-cut activities, like running an ad opposing a candidate or making endorsements in a particular race. But it also can include other activities where the organization uses its resources to give one candidate an advantage over another.
In this determination, the IRS addressed one of these less obvious situations. Here, the organization applying for recognition as a 501(c)(3) told the IRS it planned to hold symposiums of “thinkers, statesmen and opinion leaders” as its primary activity. The organization anticipated that elected politicians, as well as candidates in the 2012 presidential race about to compete in a key primary, would be in attendance and would be speakers. An agenda for the symposium submitted by the organization to the IRS showed that all political speakers invited were affiliated with one particular party; it also included a “Meet the Candidates” event, for attendees paying an additional fee.
In planning its symposium, the organization also internally discussed using contacts within the political party to get speakers and to increase attendance, targeting county party groups for attendees, coordinating with local college and high school groups associated with the party for events, and keeping the state party chair up to date and involved in decisions. …
Continue Reading Too Close for Comfort? The IRS Gives New Guidance on 501(c)(3)s and Working with Candidates
Earlier this month, Virginia Governor Terry McAuliffe signed into law a new bill making significant changes to Virginia’s lobbying and gift laws. The critical changes made by this bill, Senate Bill No. 1424, will become effective on January 1, 2016. Many of the revisions focus on gift reform, but the bill also contains important changes affecting lobbying as well as pay-to-play compliance. …
Continue Reading Virginia Tightens the Reins: Major Lobbying and Gift Law Changes to Take Effect in 2016
First quarter lobbying disclosure reports are due on Monday, April 20. This report, the LD-2, is where organizations report their expenses for federal lobbying efforts. The first quarter of a year is often a good time to evaluate your organization’s recordkeeping and processes for filling out the report and to determine what changes may need to be made. Keep in mind these key aspects of preparing the report: …
Continue Reading First Quarter LD-2 Reports Deadline Approaching
With donors now allowed to give unlimited sums to Super PACs and other political advocacy groups, the biggest issue in campaign finance regulation is what such groups must disclose about their fundraising and spending, and when. Some states have moved aggressively to bolster their disclosure rules, with a couple of states filing suit to force …