26 CFR §1.162-29

1. (a)Scope. This section provides rules for determining whether an activity is influencing legislation for purposes of section 162(e)(1)(A). This section does not apply for purposes of sections 4911 and 4945 and the regulations thereunder.
2. (b)Definitions. For purposes of this section—
   1. (1)Influencing legislation. Influencing legislation means—
      1. (i)Any attempt to influence any legislation through a lobbying communication; and
      2. (ii)All activities, such as research, preparation, planning, and coordination, including deciding whether to make a lobbying communication, engaged in for a purpose of making or supporting a lobbying communication, even if not yet made. See paragraph (c) of this section for rules for determining the purposes for engaging in an activity.
   2. (2)Attempt to influence legislation. An attempt to influence any legislation through a lobbying communication is making the lobbying communication.
   3. (3)Lobbying communication. A lobbying communication is any communication (other than any communication compelled by subpoena, or otherwise compelled by Federal or State law) with any member or employee of a legislative body or any other government official or employee who may participate in the formulation of the legislation that—
      1. (i)Refers to specific legislation and reflects a view on that legislation; or
      2. (ii)Clarifies, amplifies, modifies, or provides support for views reflected in a prior lobbying communication.
   4. (4)Legislation. Legislation includes any action with respect to Acts, bills, resolutions, or other similar items by a legislative body. Legislation includes a proposed treaty required to be submitted by the President to the Senate for its advice and consent from the time the President's representative begins to negotiate its position with the prospective parties to the proposed treaty.
   5. (5)Specific legislation. Specific legislation includes a specific legislative proposal that has not been introduced in a legislative body.
   6. (6)Legislative bodies. Legislative bodies are Congress, state legislatures, and other similar governing bodies, excluding local councils (and similar governing bodies), and executive, judicial, or administrative bodies. For this purpose, administrative bodies include school boards, housing authorities, sewer and water districts, zoning boards, and other similar Federal, State, or local special purpose bodies, whether elective or appointive.
   7. (7)Examples. The provisions of this paragraph (b) are illustrated by the following examples.
3. (c)Purpose for engaging in an activity
   1. (1)In general. The purposes for engaging in an activity are determined based on all the facts and circumstances. Facts and circumstances include, but are not limited to—
      1. (i)Whether the activity and the lobbying communication are proximate in time;
      2. (ii)Whether the activity and the lobbying communication relate to similar subject matter;
      3. (iii)Whether the activity is performed at the request of, under the direction of, or on behalf of a person making the lobbying communication;
      4. (iv)Whether the results of the activity are also used for a nonlobbying purpose; and
      5. (v)Whether, at the time the taxpayer engages in the activity, there is specific legislation to which the activity relates.
   2. (2)Multiple purposes. If a taxpayer engages in an activity both for the purpose of making or supporting a lobbying communication and for some nonlobbying purpose, the taxpayer must treat the activity as engaged in partially for a lobbying purpose and partially for a nonlobbying purpose. This division of the activity must result in a reasonable allocation of costs to influencing legislation. See § 1.162-28 (allocation rules for certain expenditures to which section 162(e)(1) applies). A taxpayer's treatment of these multiple-purpose activities will, in general, not result in a reasonable allocation if it allocates to influencing legislation—
      1. (i)Only the incremental amount of costs that would not have been incurred but for the lobbying purpose; or
      2. (ii)An amount based solely on the number of purposes for engaging in that activity without regard to the relative importance of those purposes.
   3. (3)Activities treated as having no purpose to influence legislation. A taxpayer that engages in any of the following activities is treated as having done so without a purpose of making or supporting a lobbying communication—
      1. (i)Before evidencing a purpose to influence any specific legislation referred to in paragraph (c)(3)(i)(A) or (B) of this section (or similar legislation)—
         1. (A)Determining the existence or procedural status of specific legislation, or the time, place, and subject of any hearing to be held by a legislative body with respect to specific legislation; or
         2. (B)Preparing routine, brief summaries of the provisions of specific legislation;
      2. (ii)Performing an activity for purposes of complying with the requirements of any law (for example, satisfying state or federal securities law filing requirements);
      3. (iii)Reading any publications available to the general public or viewing or listening to other mass media communications; and
      4. (iv)Merely attending a widely attended speech.
   4. (4)Examples. The provisions of this paragraph (c) are illustrated by the following examples.
4. (d)Lobbying communication made by another. If a taxpayer engages in activities for a purpose of supporting a lobbying communication to be made by another person (or by a group of persons), the taxpayer's activities are treated under paragraph (b) of this section as influencing legislation. For example, if a taxpayer or an employee of the taxpayer (as a volunteer or otherwise) engages in an activity to assist a trade association in preparing its lobbying communication, the taxpayer's activities are influencing legislation even if the lobbying communication is made by the trade association and not the taxpayer. If, however, the taxpayer's employee, acting outside the employee's scope of employment, volunteers to engage in those activities, then the taxpayer is not influencing legislation.
5. (e)No lobbying communication. Paragraph (e) of this section applies if a taxpayer engages in an activity for a purpose of making or supporting a lobbying communication, but no lobbying communication that the activity supports has yet been made.
   1. (1)Before the filing date. Under this paragraph (e)(1), if on the filing date of the return for any taxable year the taxpayer no longer expects, under any reasonably foreseeable circumstances, that a lobbying communication will be made that is supported by the activity, then the taxpayer will be treated as if it did not engage in the activity for a purpose of making or supporting a lobbying communication. Thus, the taxpayer need not treat any amount allocated to that activity for that year under § 1.162-28 as an amount to which section 162(e)(1)(A) applies. The filing date for purposes of paragraph (e) of this section is the earlier of the time the taxpayer files its timely return for the year or the due date of the timely return.
   2. (2)After the filing date
      1. (i)In general. If, at any time after the filing date, the taxpayer no longer expects, under any reasonably foreseeable circumstances, that a lobbying communication will be made that is supported by the activity, then any amount previously allocated under § 1.162-28 to the activity and disallowed under section 162(e)(1)(A) is treated as an amount that is not subject to section 162(e)(1)(A) and that is paid or incurred only at the time the taxpayer no longer expects that a lobbying communication will be made.
      2. (ii)Special rule for certain tax-exempt organizations. For a tax-exempt organization subject to section 6033(e), the amounts described in paragraph (e)(2)(i) of this section are treated as reducing (but not below zero) its expenditures to which section 162(e)(1) applies beginning with that year and continuing for subsequent years to the extent not treated in prior years as reducing those expenditures.
6. (f)Anti-avoidance rule. If a taxpayer, alone or with others, structures its activities with a principal purpose of achieving results that are unreasonable in light of the purposes of section 162(e)(1)(A) and section 6033(e), the Commissioner can recast the taxpayer's activities for federal tax purposes as appropriate to achieve tax results that are consistent with the intent of section 162(e)(1)(A), section 6033(e) (if applicable), and this section, and the pertinent facts and circumstances.
7. (g)Taxpayer defined. For purposes of this section, a taxpayer includes a tax-exempt organization subject to section 6033(e).
8. (h)Effective date. This section is effective for amounts paid or incurred on or after July 21, 1995. Taxpayers must adopt a reasonable interpretation of section 162(e)(1)(A) for amounts paid or incurred before this date.