Can I Deduct Political and Lobbying Expenses?
Political and Lobbying Expenses for a Business are Non-deductible
First, let's make it clear that political expenses of any kind are not tax deductible as business expenses or personal expenses. Now, let's look at some details about the types of political expenses that are non-deductible. The IRS covers practically everything you can think of in its mission to tell you that political and lobbying costs are never deductible.
Lobbying expenses - money used to influence a legislative body at the local, state, or federal level - are non-deductible. According to the IRS (Publication 529), this includes expenses for these types of activities:
- Influence legislation,
- Participate, or intervene, in any political campaign for, or against, any candidate for public office,
- Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or
- Communicate directly with covered executive branch officials in an attempt to influence the official actions or positions of those officials.
A "covered executive branch official" includes the President, Vice President, an officer or executive of the White House, or Cabinet-level officials and their deputies.
Expenses for doing research, preparing for lobbying activities, and travel to and from these types of activities is non-deductible.
If you or someone else in your business is running for political office, you may not deduct the expenses involved in running a political campaign as a business or personal tax deductions. In Publication 529, the IRS also says:
You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. These include qualification and registration fees for primary elections.
Contributions to a campaign committee or a newsletter are also non-deductible.
Other Political Expenses and Contributions
Other types of political activities that are not allowed as tax deductions:
- Expenses for political activities, such as campaign dinners and events for political parties or candidates
- Political contributions or gifts to political candidates.
- Donations to political action committees (PAC's)
- The portion of dues to professional organizations that are designated for political lobbying.
- Amounts you pay in union dues that are related to lobbying or political activities.
In addition, you cannot claim a charitable deduction for contributions to a group which conducts lobbying activities that have a direct effect on your business.
One Small Loophole
You might be able to take advantage of this small loophole in the "no deductions for political stuff" decree. Your business may be able to deduct up to $2,000 per year in expenses to influence local legislation (state, county, or city). But this doesn't include deductions for hiring a lobbyist to do the influencing.
This article presents general information; I am not a tax attorney or tax preparation specialist. Refer to IRS publications and ask your tax professional if you have questions about specific types of tax-deductible expenses.