Problem:
Help, Inc., a tax-exempt organization, incurs lobbying expenses of $275,000 during the tax year. Help is eligible for and makes the 501 (h) lobbying expenditure election. During the year, Help spends $1,2000,000 carrying out its exempt mission.
Required:
Question 1: Will the lobbying expense result in Help losing its exempt status?
Question 2: Calculate the amount of any tax that Help must pay associated with its lobbying expenses.
Note: Please show how you came up with the solution.