May 04, 1992
Certain Tax Exempt Organizations
May Not Engage in Political Campaign Activities
WASHINGTON - Charities should be careful that their efforts to
educate voters stay within the Internal Revenue Service guidelines
for political campaign activities.
Organizations exempt from federal income tax under section
501(c)(3) of the Internal Revenue Code are prohibited from
participating or intervening, directly or indirectly, in any
political campaign on behalf of or in opposition to any candidate
for public office. Charities, educational institutions and religious
organizations, including churches, are among those tax exempt under
this code section.
"These organizations cannot endorse any candidates, make
donations to their campaigns, engage in fund raising, distribute
statements, or become involved in any other activities that may be
beneficial or detrimental to any candidate," said John E. Burke,
assistant commissioner, employee plans and exempt organizations.
Whether an organization is engaging in prohibited political
campaign activity depends upon all the facts and circumstances in
each case. For example, organizations may sponsor debates or forums
to educate voters. But if the forum or debate shows a preference for
or against a certain candidate, it becomes a prohibited activity.
The Second Circuit Court of Appeals held that the "voter
education activities" of the Association of the Bar of the City of
New York constituted prohibited campaign activities. The association
rates and publishes the ratings of candidates for elective judicial
office. The association had been tax-exempt under 501(c)(6) and had
requested reclassification under 501(c)(3). The Service denied the
reclassification because the association's rating of candidates
violates the political campaign prohibition, and the Second Circuit
upheld the action.
If IRS finds an organization engaged in prohibited political
campaign activity, the organization could lose its exempt status and
be subject to an excise tax on the amount of money spent on that
activity. In cases of flagrant violation of the law, IRS has the
authority to make an immediate determination and assessment of tax.
Also, IRS can seek an injunction from a federal district court to
prohibit the organization from making further political
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