Lobbying Expenses. EarthFriendly, Inc., an IRC Sec. 501 (c) (3) organization, incurred lobbying expenses of $150,000 and exempt purpose expenditures of $1.2 million in carrying

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Lobbying Expenses. EarthFriendly, Inc., an IRC Sec. 501 (c) (3) organization, incurred lobbying expenses of $150,000 and exempt purpose expenditures of $1.2 million in carrying out its exempt mission.
Required
a. What are the tax consequences if the organization does not elect to participate in lobbying activities on a limited basis?
b. Discuss the factors involved in the association’s decision to elect to participate in lobbying activities under IRC Sec. 501 (h).