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

OLRC 119-134 · eCFR 2026-10-19 · 2 regs · 1 amending Acts

Enacted 1976 · Pub. L. 94-455 Amended · 1 Acts

19761987(a) General rule(b) Regulations to prevent avoidance(c) Churches, etc.
Prior provisions 1
  • A prior section 504, acts Aug. 16, 1954, ch. 736, 68A Stat. 168; Oct. 22, 1968, Pub. L. 90–630, § 6(a), 82 Stat. 1330, related to denial of exemption, prior to repeal by Pub. L. 91–172, title I, § 101(j)(15), Dec. 30, 1969, 83 Stat. 527. For effective date of repeal, see section 101(k)(2)(B) of Pub. L. 91–172, set out as an Effective Date note under section 4940 of this title.
Connections Cited by 0 · Cites 1
    § 504 Status after organization ceases to qualify for exemption under section 501(c)(3) because of substantial lobbying or because of political activities
    § 1.504-1 Attempts to influence legislation; certain organizations formerly described in section 501(c)(3) denied exemption.§ 1.504-2 Certain transfers made to avoid section 504(a).
    Amended 1987
    • 1987 Pub. L. 100-203 Pub. L. 100–203, § 10711(b)(2)(A), substituted “substantial lobbying or because of political activities” for “substantial lobbying” in section catchline.

    Cases: The Erie Endowment v. United States, 316 F.2d 151 (3rd Cir. 1963)

    (a) General rule An organization which—

    Textual readingALL OF= not treated as 501(c)(4) organization

    (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

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

      Amended 1987
      • 1987 Pub. L. 100-203 Pub. L. 100–203, § 10711(b)(1), 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,”.
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        (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).

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          (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.

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            (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).