§6852 Termination Assessments in Case of Flagrant Political Expenditures of Section 501(c)(3) Organizations

Summary

If the IRS finds a 501(c)(3) charity made political spending that is a blatant violation, the IRS must immediately figure out any income tax due for the current year or the last year, and any excise tax under section 4955 for the charity or its managers for those political spending periods. The tax becomes due right away. The IRS must assess the tax at once (including any interest or extra amounts), send a notice and demand immediate payment, and treat any money collected as payment of those taxes. For the current year, the IRS figures tax from the first day of the year up to the day it makes the finding, as if that were a full tax year. The IRS cannot make an assessment for the prior year if the assessment is made after the return’s due date (including extensions). The law uses these terms as defined in section 4955: section 501(c)(3) organization (a tax-exempt charity), political expenditure (money spent to influence elections), and organization manager (a person who runs or controls the charity). Other standard assessment and collection rules apply, but the decision to act is based on whether the spending was a flagrant violation, not on whether tax collection is in jeopardy.