Internal Revenue Service Audits of Grass-Roots Lobbying Expenses

Published by the Government Accountability Office on 1977-11-09.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                             DOCUORBT BBSUE

07118 - [B2687737] (Restricted)
[ Internal Revenue Service Audits of Grass-Rocts Lobbying
Expenses]. B-137762. November 9, 1977. 5 pp.
Report to Jerome Kurtz, Commissioner, Internal Revenue
                                                  Government Div.
by Richard L. Fogel, Associate Director,  General

Contact: General Government Div.
Organizaticn Concerned: Federal Power Commission.
Authority: Internal Revenue Code, sec. 162.
           Testisony presented before the Congress on proper
accounting for corporate expenses for political             advertising
indicated that energy-related        industries    may  be  improperly
treating   costs  associated    with  political    advertising   and that
                                        be  occurring.   A  GAO report
questionat-e tax deductions may
expressed a similar concerns, but          the Internal Revenue Service
 (IRBS) has taken  little    action  to  improve   guidance to taxpayers
and to its auditors in this regard. iRS           should:   clarify existing
regulations in the area of political           advertising   and orass-roots
lobbying, systematically       test  the   practices   follcwed   by industry
                 area    of advertising    and  lobbying   expenses  to
groups in the                                               action,  provide
determine possible noncompliance and corrective develop
more sFecific audit criteria for         IRS   agents,  and
additional guidance for auditors to follow in separating
grass-roots lobbying and advertising expenses frcm allowable
deductions. (HTU)