Helpers, Inc., a qualifying § 501(c)(3) organization, incurs lobbying expenditures of $250,000 for the taxable year and grass roots expenditures of $0. Exempt purpose expenditures for the taxable year are $1,200,000. Helpers elects to be eligible to make lobbying expenditures on a limited basis. Click here to access Exhibit 15.2.

a. What is the ceiling amount of lobbying expenditures under the terms of the election? $ _________

What is the amount of lobbying expenditures Helper is permitted to deduct? $ __________

b. What is its tax liability as a result of the election? $ __________

Calculation of Lobbying Nontaxable Amount

Exempt Purpose Expenditures	Lobbying Nontaxable Amount Is
Not over $500,000	20% of exempt purpose expenditures *
Over $500,000 but not over $1 million	$100,000 + 15% of the excess of exempt purpose expenditures over $500,000
Over $1 million but not over $1.5 million	$175,000 + 10% of the excess of exempt purpose expenditures over $1 million
Over $1.5 million	$225,000 + 5% of the excess of exempt purpose expenditures over $1.5 million