PLR: Indirect operation of political action committee by tax-exempt organization via shared-services agreement

Indirect operation of PAC by tax-exempt organization

The IRS on January 31, 2020, publicly released a private letter ruling* concluding that the operation of a political action committee (PAC) by a charity’s for-profit subsidiary constituted participation or intervention in a political campaign by the charity and that a resource-sharing arrangement between the charity and subsidiary resulted in private benefit.

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Read PLR 202005020 [PDF 111 KB] (released January 31, 2020, and dated October 31, 2019). KPMG expects to provide additional analysis and observations in a subsequent report.

*Private letter rulings are taxpayer-specific rulings furnished by the IRS Office of Chief Counsel in response to requests made by taxpayers and can only be relied upon by the taxpayer to whom issued. Pursuant to section 6110(k)(3), written determinations such as private letter rulings are not intended to be relied upon by third parties and may not be cited as precedent. These written determinations may, however, offer an indication of the IRS’s position on the issues addressed.

For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal | +1 202 533 8817 | ruthmadrigal@kpmg.com

Preston Quesenberry | +1 202 533 3985 | pquesenberry@kpmg.com

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