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TITLE 26-INTERNAL REVENUE CODE (e) Appearances, etc., with respect to legislation (1) In general The deduction allowed by subsection (a) shall include all the ordinary and necessary expenses (including, but not limited to, travel- ing expenses described in subsection (a)(2) and the cost of preparing testimony) paid or incurred during the taxable year in carrying on any trade or business- (A) in direct connection with appearances before, submission of statements to, or sending communications to, the commit- tees, or individual members, of Congress or of any legislative body of a State, a posses- sion of the United States, or a political sub- division of any of the foregoing with respect to legislation or proposed legislation of direct interest to the taxpayer, or (B) in direct connection with communica- tion of information between the taxpayer and an organization of which he is a member with respect to legislation or pro- posed legislation of direct interest to the taxpayer and to such organization, and that portion of the dues so paid or in- curred with respect to any organization of which the taxpayer is a member which is at- tributable to the expenses of the activities de- scribed in subparagraphs (A) and (B) carried on by such organization. (2) Limitation The provisions of paragraph (1) shall not be construed as allowing the deduction of any amount paid or incurred (whether by way of contribution, gift, or otherwise)- (A) for participation in, or intervention in, any political campaign on behalf of any candidate for public office, or (B) in connection with any attempt to in- fluence the general public, or segments thereof, with respect to legislative matters, elections, or referendums. (f) Fines and penalties No deduction shall be allowed under subsec- tion (a) for any fine or similar penalty paid to a government for the violation of any law. (g) Treble damage payments under the antitrust laws If in a criminal proceeding a taxpayer is con- victed of a violation of the antitrust laws, or his plea of guilty or nolo contendere to an indict- ment or information charging such a violation is entered or accepted in such a proceeding, no deduction shall be allowed under subsection (a) for two-thirds of any amount paid or incurred- (1) on any Judgment for damages entered against the taxpayer under section 4 of the Act entitled "An Act to supplement existing laws against unlawful restraints and monopo- lies, and for other purposes", approved Octo- ber 15, 1914 (commonly known as the Clayton Act), on account of such violation or any re- lated violation of the antitrust laws which oc- curred prior to the date of the final judgment of such conviction, or (2) in settlement of any action brought under such section 4 on account of such viola- tion or related violation. The preceding sentence shall not apply with re- spect to any conviction or plea before January 1, 1970, or to any conviction or plea on or after such date in a new trial following an appeal of a conviction before such date. (h) Cross reference (1) For special rule relating to expenses in connection with subdividing real property for sale, see section 1237. (2) For special rule relating to the treatment of pay. ments by a transferee of a franchise, trademark, or trade name, see section 1253. (Aug. 16, 1954, ch. 736, 68A Stat. 45; Sept. 2, 1958, Pub. L. 85-866, title I, § 5(a), 72 Stat. 1608; Sept. 14, 1960, Pub. L. 86-779, §§ 7(b), 8(a), 74 Stat. 1002, 1003; Oct. 16, 1962, Pub. L. 87-834, §§ 3(a), 4(b), 76 Stat. 973, 976; Dec. 30, 1969, Pub. L. 91-172, title V, § 516(c)(2)(A), title IX, §902(a), (b), 83 Stat. 648, 710; Dec. 10, 1971, Pub. L. 92-178, title III, §301(a), 85 Stat. 525; Oct. 4, 1976, Pub. L. 94-455, title XIX, §§1901(c)(4), 1906(b)(13)(A), 90 Stat. 1803, 1834.) REFERENCES IN TEXT The Social Security Act, referred to in subsec. (c)(3), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended, which is classified generally to chapter 7 § 301 et seq.) of Title 42, The Public Health and Welfare. For com- plete classification of this Act to the Code, see section 1305 of Title 42 and Tables volume. The antitrust laws, referred to in subsec. (g), are classified generally to section 1 et seq. of Title 15, Commerce and Trade. Section 4 of the Clayton Act, referred to in subsec. (g)(1), is classified to section 15 of Title 15, Commerce and Trade. AMENDMnrr S 1976-Subsec. (a). Pub. L. 94-455, § 1901(c)(4), struck out reference to Territory in provisions following par. (3). Subsee. (c). Pub. L. 94-455, § 1906(b)(13)(A), struck out in par.j. (1) and (2) "or his delegate" following "Secretary". 1971-Subsec. (c). Pub. L. 92-178, § 310(a)(2), substi- tuted "Illegal bribes, kickbacks, and other payments" for "Bribes and illegal kickbacks" as subsec. heading. Subsec. (c)(2). Pub. L. 92-178, § 310(a)(1), substituted provisions respecting "Other illegal payments" for former provisions on "Other bribes or kickbacks" reading "If in a criminal proceeding a taxpayer is con- victed of making a payment (other than a payment de- scribed in paragraph (1) which is an illegal bribe or kickback, or his plea of guilty or nolo contendere to an indictment or information charging the making of such a payment is entered or accepted in such a pro- ceeding, no deduction shall be allowed under subsec- tion (a) on account of such payment or any related payment made prior to the date of the final judgment in such proceeding." Subsec. (c)(3). Pub. L. 92-178, §310(a)(1), substituted provisions respecting kickbacks, rebates, and bribes under medicare and medicaid for former statute of limitations provisions. 1969-Subsec. (c). Pub. L. 91-172, § 902(b), designated existing provisions as par. (1), and in par. (1) so desig- nated, extended the applicability of nondeductible ex- penses for payments to any official or employee of any government, or of any agency or instrumentality of any government, and added pars. (2) and (3). Subsec. (f). Pub. L. 91-172, § 902(a). added subsec. (f). Former subsec. (f) redesignated (h). Subsec. (g). Pub. L. 91-172, §902(a), added subsec. (g). Subsec. (h). Pub. L. 91-172. H§516(c)(2)(A), 902(a), re- designated former subsec. (f) as (h) and, in subsec. (h) as so redesignated, substituted "() For" for "For" and added reference to section 1253 for special rule relat- ing to the treatment of payments by a transferee of a franchise, trademark, or trade name. § 162 Page 140