The Council–headed by Trita Parsi–is set up as a 501(c)(3) non-profit organization, which means that it is allowed to engage in some lobbying, but will lose its tax-exempt status if it does so. The benefit of being a (c)(3) is that donations to NIAC are tax-deductible. If an organization really wants to lobby, it has to organize itself under Section 501(c)(4) of the Internal Revenue Code.
But as Eli Lake points out, NIAC may have crossed the line into lobbying, despite its maintenance of non-profit status.
The piece is long, but well worth reading. And if Lake’s investigation into NIAC’s activities have merit, not only will something have to be done about laws that may have been broken, but the nature of policymaking vis-à-vis Iran will change significantly.