With the upcoming election year steadily approaching, the limitations on political campaign contributions for a tax-exempt organization can be a complex issue. An IRC Section 501(c)(3) organization is prohibited from participating or intervening, directly or indirectly, in any political campaign on behalf of, or in opposition to any candidate for public office. This does not mean that all lobbying and activist activities are no longer possible. Instead, it suggests that the political campaign activities for which the organization engages must not support one candidate over another. This limitation on lobbying and activities does not generally apply to the political activities of most other tax-exempt organizations; however, political expenditures of any kind may be subject to taxation under Section 527. Taxes under Section 527 are for expenditures by tax-exempt organizations aimed at influencing the selection, nomination, election, or appointment of an official to office.

There are 3 political campaign activities that meet the prohibited participation or intervention requirement for Section 501(c)(3) organizations:
1) publication or distribution of written or printed statements or the making of oral statements on behalf of, or in opposition to, a candidate for public office;
2) payment of campaign workers salaries or expenses; and
3) conducting, or payment of expenses of conducting, a voter registration drive limited to the geographic area covered by the campaign.

A Section 501(c)(3) organization will likely be disqualified from tax-exempt status should it engage in any of the above political activities.

There are things a Section 501(c)(3) organization can do to participate in political activities and campaigns without losing their tax-exempt status. For instance, voter education programs are not prohibited. Nonpartisan candidate debates are also allowed, but if the questions posed to the candidates indicate a bias, the IRS may take the position that the organization is participating in a political campaign.

-by Dorian V. George, Legal Assistant

The Dandridge Firm can assist with your nonprofit IRC 501(c) tax matters. Should you want to learn more about this post or our services, please visit www.DandridgeLaw.com or email ContactUs@DandridgeLaw.com for a FREE Legal Evaluation.

Labels: 501c3, 501c3 tax-exempt status, nonprofit, nonprofit compliance, Nonprofit contributions

It is common for the United States Patent and Trademark Office (USPTO) to require you to disclaim exclusive rights of particular words in a trademark, which normally occurs with general terms or descriptive phrases. For instance, if you want a trademark for your company’s name, “Brick Top’s Auto Shop,” the term “Auto Shop” would most likely be too general by itself to permit USPTO registration as a trademark. While you should be able to gain exclusive rights to the words, "Brick Top's," to prevent another company from using it, as in "Brick Top's Sandwich Shop,” you would most likely have to disclaim exclusive rights to the words, "Auto Shop." This means that another company could potentially register a trademark for the name, "Jones Auto Shop," but would not be able to register a company with the words, "Brick Top's."

If the words that are to be disclaimed ("Auto Shop") are not particularly essential to the branding of your organization, and you are unafraid that your competitor’s use of those same words will cause any kind of confusion to your consumers, than accepting the disclaimer may be beneficial. Clearly, there are tons of auto shops out there in the market, and your brand recognition may come from unique words, such as, "Brick Top's." By agreeing to disclaim the words, "Auto Shop," it may be possible to insure a faster publication of the trademark.

However, if the words that need to be disclaimed are essential to the branding of your organization, there are ways of proving that the words must be accepted as part of the entire trademark. For instance, if your company is using a term that is normally seen as descriptive, i.e. “Auto Shop,” proving that your company provides services that differ from those normally found in an auto shop may allow you the exclusive rights to use those words as a part of your mark. Another way to claim exclusive rights of a general term would be to show that the trademark is unitary, meaning it creates a single, recognizable unit that is unlikely to be split into its individual components in the mind of the consumer. Using the “Brick Top’s Auto Shop” example, the rhyming nature of the words may give the phrase a unitary mark, which creates in the consumer’s mind a singular unit eligible to be trademarked.

-by Dorian V. George, Legal Assistant

The Dandridge Firm can prepare and file your USPTO Trademark registration and assist with Trademark disclaimer matters. Should you want to learn more about this post or our services, please visit www.DandridgeLaw.com or email ContactUs@DandridgeLaw.com for a FREE Legal Evaluation.

Labels: branding, trademark, trademark application, trademark disclaimer

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