This is a non-market factor, but it can still have a strong impact on a business. The political-legal environment is a combination of many factors such as the current political party, the degree of politicization of trade and industry, the effectiveness of the current government, government policy, the current legal framework, the attitude of the public towards the economy, etc. Political law (or law of political activity[1]) is an established area of law that encompasses the intersection of politics and law. Political law includes electoral law, electoral law, campaign finance law, lobbying and lobbyist laws, open government laws, codes of ethics of the legislative and executive branches, legislative procedures, administrative procedures, constitutional law, and legislative and regulatory projects. [2] [3] Political laws apply primarily to government officials, candidates, interest groups, lobbyists, corporations, not-for-profit organizations and unions. Holland & Knight`s Political Law Group helps clients navigate the complex world of political law by developing internal compliance programs, reviewing campaign contributions and giveaways, and representing clients in investigations. IRS Compliance Regarding Lobbying and Political Campaign Activities: A country`s political climate is another critical factor that managers must consider in their day-to-day business activities. The scope of government activity, the types of laws it passes, and the overall political stability of a government are three components of the political climate. For example, a multinational like General Electric assesses the political climate of a country before deciding to set up a factory there. Is the government stable or could a coup disrupt the country? To what extent are the regulations applicable to foreign companies, including foreign ownership of business property and taxation? Import duties, quotas and export restrictions must also be taken into account. All businesses that come into contact with government employees must be aware of and comply with conflict of interest laws, post-employment restrictions, and gift and travel rules. With the passage of the HLOGA in 2007, violations of House and Senate rules on gifts and travel are now violations of the LDA for lobbyists and organizations that employ lobbyists.

HLOGA has also included increased restrictions on post-employment, gifts and travel. In 2009, President Obama signed Executive Order 13490, which introduced new restrictions on gifts and post-employment for politically appointed individuals in the executive branch. Each state and most places also have separate ethical provisions. An understanding of the definition of lobbying and political campaigning activities is crucial for all organizations, regardless of their tax status. Tax-exempt organizations must ensure compliance with IRS restrictions on political and lobbying activities by knowing the operational definitions, limitations, and restrictions in this area and how they apply to certain types of 501(c) organizations. Taxable corporations cannot deduct their operating expenses for most lobbying and political expenses. In addition, business associations must inform their members that the portion of their contributions attributable to the association`s lobbying is not deductible. Political organizations such as PACs, political parties, and advocacy groups must comply with Section 527 of the IRC and IRS disclaimer. Federal courts will refuse to hear a case if they believe it raises a political issue. This doctrine refers to the idea that an issue is so politically charged that federal courts, generally considered an apolitical branch of government, should not hear the issue. The doctrine is also known as the doctrine of justiciability or doctrine of incompetence. Campaign Finances Act: Federal law limits who can contribute to a campaign, how much they can contribute and how that contribution is spent.

The rules vary depending on the status of the supplier (company or individual) and can be difficult to navigate. We help our clients process campaign contributions, establish and maintain political action committees (PACs), prepare and review federal and state election commissions (FECs), and implement risk avoidance strategies to prevent violations of the Federal Election Campaign Act (FECA) and other related state and local laws.