this is a repost from a post i made during 7/04 ... it provides the exact IRS interpretation of the law:
We've had plenty of discussion on DU about whether bush/cheney have stepped over the line by soliciting campaign support from tax exempt churches ... they have !!! Here is the IRS position on exactly what the current law allows tax exempt organizations to do and exactly what it prohibits ...
On 6/10/04, the IRS issued the following guidance to religious institutions and political parties as to what conduct was and was not allowed by tax exempt religious institutions (section 501(c)(3) organizations).
Note the key line in the letter: Under the law, organizations described in section 501(c)(3) of the Internal Revenue Code that are exempt from federal income tax are prohibited from directly or indirectly participating or intervening in any political campaign on behalf of, or in opposition to, any candidate for public office.source:
http://www.irs.gov/newsroom/article/0,,id=123922,00.htm...IRS Issues Letter on Exempt Organizations
IR-2004-79, June 10, 2004
WASHINGTON — In a letter sent today to national political parties, the Internal Revenue Service reissued guidance regarding political activities by tax-exempt organizations, including churches. The letter supplements information contained in a news release issued by the IRS on April 28th of this year. The IRS has issued a similar news release in each presidential election year since 1992.
“We are sending the letters because we want to ensure that the political committees and the candidates they support understand the rules,” said IRS Commissioner Mark W. Everson. “As Congress considers changes to the law in this area, it is important that political organizations keep in mind the requirements of existing law. Today’s guidance does not represent a change in the rules or a change in how the IRS will administer the law in this area.”
Under the law, organizations described in section 501(c)(3) of the Internal Revenue Code that are exempt from federal income tax are prohibited from directly or indirectly participating or intervening 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 that are tax-exempt under this code section.
If the IRS finds a section 501(c)(3) organization engaged in prohibited campaign activity, the organization could lose its tax-exempt status and be subject to an excise tax on the amount of money spent in that activity.
The political campaign prohibition as it applies to churches is discussed in Publication 1828, Tax Guide for Churches and Religious Organizations. This publication, along with other information about the political campaign prohibition, is available on this Web site.
Related Items:
Letter on political activity of 501(c)(3) organizations
(
http://www.irs.gov/pub/irs-utl/eo_letter.pdf )
Pub. 1828 (PDF 1.3M) — Tax Guide for Churches and Religious Organizations
(
http://www.irs.gov/pub/irs-pdf/p1828.pdf )
IR-2004-59 — Charities May Not Engage In Political Campaign Activities (
http://www.irs.gov/newsroom/article/0,,id=122887,00.htm... )
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Additional info from the IRS:
source:
http://www.irs.gov/pub/irs-utl/eo_letter.pdf<snip>
Whether a tax-exempt charitable organization is engaging in prohibited political campaign activity depends upon all the facts and circumstances in each case. For example, organizations may encourage people to participate in the electoral process by sponsoring debates or forums to educate voters, distributing voter guides, or conducting
voter registration or get-out-the-vote drives.
If the debate or forum, voter guide, or voter registration or get-out-the-vote drive shows a preference for or against a certain candidate or party, however, it becomes a prohibited activity. Thus, under Federal law tax-exempt charitable organizations are prohibited from endorsing any candidates, making donations to their campaigns, engaging in fund-raising, distributing statements, or becoming involved in any other activities that may be beneficial or detrimental to any candidate. Even activities that encourage people to vote for or against a particular candidate on the basis of nonpartisan criteria violate the political campaign prohibition of section 501(c)(3).
The federal courts have upheld this prohibition on political campaign activity, most recently in Branch Ministries v. Rossotti, 211 F.3d 137 (D.C. Cir. 2000). The courts have held that it is not unconstitutional for the tax law to impose conditions, such as the
political campaign prohibition, upon exemption from federal income tax. The prohibition on political campaign activity applies only to tax-exempt charitable organizations, not to the activities of individuals in their private capacity. The political campaign activity prohibition is not intended to restrict free expression on political matters by leaders of charitable organizations, including churches, speaking for themselves, as individuals. Nor are leaders prohibited from speaking about important issues of public policy.
However, for their organizations to remain tax-exempt under
section 501(c)(3), leaders cannot make partisan comments in official organization publications or at official organization functions, including official church publications and functions. Similarly, the prohibition on political campaign activity does not prohibit charitable organizations from having contact of any kind with individuals who are candidates for public office.
Depending on the facts and circumstances, a charitable organization, such as a church, may invite political candidates to speak at its events without jeopardizing its tax-exempt status. A charitable organization may invite political candidates to speak in their capacity as candidates if the organization takes steps to ensure that:
• It provides an equal opportunity to other political candidates seeking the same office,
• It does not indicate any support of or opposition to any candidate, and 3
• No political fund-raising occurs.
A charitable organization may invite a political candidate to speak in his or her individual (non-candidate) capacity if the organization takes steps to ensure that:
• The candidate speaks only in a non-candidate capacity,
• Neither the candidate nor any representative of the organization makes any mention of the election or candidacy of the individual, and
• No campaign activity occurs in connection with the candidate’s attendance.
If the IRS finds a section 501(c)(3) organization engaged in prohibited campaign activity, the organization could lose its tax-exempt status and it could be subject to an excise tax on the amount of money spent on that activity.
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