IRS Issues Liberal Ruling Regarding Exempt Organizations and Political Action Committees


Last month the IRS issued Private Letter Ruling 201127013 (the “Ruling”), which held that an organization classified as a Section 501(c)(3) public charity (the “Parent”) will not lose its Section 501(c)(3) tax-exempt status as a result of (i) a controlled Section 501(c)(4) entity’s (“501(c)(4) Organization”) establishment and operation of two political action committees, SPAC and FPAC, and (ii) the Parent and its subsidiaries’ (“Tax- Exempt Subsidiaries”) establishment and operation of a voluntary payroll deduction plan for employees to contribute to any Section 527 political organization.


By way of background, the Parent is a comprehensive, regional, integrated health care system. The network provides a full range of health care services including diagnosis, treatment, research, education, medical equipment and home health care. The Parent is either the sole member or holder of all issued and outstanding shares of stock in each of the Tax-Exempt Subsidiaries.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Manatt, Phelps & Phillips, LLP | Attorney Advertising

Written by:


Manatt, Phelps & Phillips, LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.