# § 504. Status after organization ceases to qualify for exemption under section 501(c)(3) because of substantial lobbying or because of political activities
**(a)** **General rule** An organization which—
shall not at any time thereafter be treated as an organization described in section 501(c)(4).
**(1)** was exempt (or was determined by the Secretary to be exempt) from taxation under section 501(a) by reason of being an organization described in section 501(c)(3), and
**(2)** is not an organization described in section 501(c)(3)—
**(A)** by reason of carrying on propaganda, or otherwise attempting, to influence legislation, or
**(B)** by reason of participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office,
**(b)** **Regulations to prevent avoidance** The Secretary shall prescribe such regulations as may be necessary or appropriate to prevent the avoidance of subsection (a), including regulations relating to a direct or indirect transfer of all or part of the assets of an organization to an organization controlled (directly or indirectly) by the same person or persons who control the transferor organization.
**(c)** **Churches, etc.** Subsection (a) shall not apply to any organization which is a disqualified organization within the meaning of section 501(h)(5) (relating to churches, etc.) for the taxable year immediately preceding the first taxable year for which such organization is described in paragraph (2) of subsection (a).
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**Source Credit**: (Added Pub. L. 94–455, title XIII, § 1307(a)(2), Oct. 4, 1976, 90 Stat. 1721; amended Pub. L. 100–203, title X, § 10711(b)(1), (2)(A), Dec. 22, 1987, 101 Stat. 1330–464.)
## Editorial Notes
### Prior Provisions
A prior section 504, acts , ; , , , related to denial of exemption, prior to repeal by , , . For effective date of repeal, see , set out as an Effective Date note under .
### Amendments
1987—, substituted “substantial lobbying or because of political activities” for “substantial lobbying” in section catchline.
Subsec. (a)(2). , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “is not an organization described in section 501(c)(3) by reason of carrying on propaganda, or otherwise attempting, to influence legislation,”.
## Statutory Notes and Related Subsidiaries
### Effective Date of 1987 Amendment
Amendment by applicable with respect to activities after , see , set out as a note under .
### Construction of Amendment
> “It is the intent of Congress that enactment of this section [amending section 501 and enacting
>
> ] is not to be regarded in any way as an approval or disapproval of the decision of the Court of Appeals for the Tenth Circuit in Christian Echoes National Ministry, Inc. versus United States, 470 F.2d 849 (1972), or of the reasoning in any of the opinions leading to that decision.”
, , , provided that: