Printable Version Email to a Friend Text of IRS Fact Sheet 2006-17 Election Year Activities and the Prohibition on Political Campaign Intervention for Section 501(c)(3) Organizations

IRS Fact Sheet: Election Year Activities and the Prohibition on Political Campaign Intervention

On Feb. 24, 2006 the Internal Revenue Service (IRS) published a fact sheet for charities and religious organizations that "is intended to help organizations understand what they can and cannot do when an election campaign is underway." The guidance covers activities that brought IRS scrutiny on groups during the 2004 election, including voter mobilization, individual activities by leaders, voter guides, candidate appearances, issue advocacy, business activity, web sites and combined activities. It includes 20 examples of allowable and unallowable activities, but the IRS stresses it does not cover every situation. This article summarizes the fact sheet. For the full text click here.

In its introduction the IRS says it "considers this fact sheet to be a living document, one that will be revised to take into account future developments and feedback." Comments can be submitted by emailing a message to tege.eo.ceo@irs.gov, or sending a letter to the following address: Internal Revenue Service, 1111 Constitution Ave. NW, Washington, DC 20224, Attn: SE:T:EO:CEO

A short summary of the tax code's prohibition on partisan activity by charities and religious groups (501(c)(3) organizations) notes that the ban applies to candidate elections at the local, state and national level. It stresses that prohibited intervention includes "any and all activities that favor or oppose one or more candidates for public office. The prohibition extends beyond candidate endorsements." The IRS will use all facts and circumstances to determine whether political intervention has occurred. Violations "may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes."

Information on Specific Activities

Voter Education, Voter Registration and Get Out the Vote Drives

These activities are permissible "if they are carried out in a nonpartisan manner." Two examples illustrate extremes, but nonprofits will find many fact situations involving permissible voter mobilization activities that fall in the middle. The example of a permissible voter registration drive involves a booth where the only information available is the name of the organization, the date of the election, and voter registration forms. In contrast, the example of impermissible activity illustrates a group operating a phone bank targeting registered voters that only provides voting reminders to people that agree with the position of one candidate.

Individual Activity of Organization Leaders

The IRS notes that leaders can speak on important public policy matters, or on partisan matters as individuals. It advises organization leaders to "clearly indicate that their comments are personal and not intended to represent the views of the organization." The four examples stress that leaders cannot use organizational resources and events to express personal partisan viewpoints.

The examples of permissible activities are:

• A disclaimer that an organizational title and affiliation in an endorsement ad are noted only for identification purposes, and
• An endorsement made at an non-organizational event where the leader makes no reference to the organization, even if news reports identify him or her with the group.

Examples of impermissible activities are:

• Using a column in an organizational newsletter to state a personal, partisan view, even if the author reimburses the organization for the space, because the newsletter is an official publication of the group, and
• A leader asks members to vote for a certain candidate at an organizational meeting.

Candidate Appearances

The fact sheet notes that candidates can attend a group's events in many capacities, as a candidate, a public official, expert or member of the general public. The IRS warns that "the candidate may not be familiar with the organization's tax-exempt status and that the candidate may be focused on compliance with election laws that apply to the candidates' campaign rather than the federal tax law that applies to the organization." Therefore, organizations should make their own determination about how to handle candidate appearances.

Speaking as a Candidate- When a group invites a candidate, the IRS says it should:

• Provide all candidates seeking the same office an equal opportunity to appear. This includes consideration of the nature of the event as well as the manner of presentation.
• Not indicate support or opposition to any candidate, and explicitly state its neutral position when the candidate is introduced and when publicizing the event
• Not allow any campaign fundraising.

Public Forums- Forums and debates are considered educational activities if they do not show bias for or against any candidate. The IRS suggests a group sponsoring a forum consider the following questions:

• Are questions presented and prepared by an independent, nonpartisan panel?
• Do the topics discussed cover a broad range of issues of interest to the public and that the candidate would address if elected?
• Is each candidate given an equal opportunity to present his or her views?
• Are the candidates asked to agree or disagree with the organization's positions?
• Do the moderator's comments imply approval or disapproval of the candidates?

The IRS uses three examples to illustrate these standards. The examples of permissible forums involve separate appearances by candidates made at similar meetings where each has an equal opportunity to address questions on a wide variety of topics and the publicity had no comments on candidate qualifications. Where one candidate declines to appear the organization notes that the order of candidate appearances is random, and that one declined to participate. The example of an impermissible forum involves a group that only asks one candidate to appear.

Speaking or Participating as a Noncandidate - The IRS says when a candidate appears at events in some other capacity, such as officeholder or expert, or attends an event open to the public, the event is not converted into a partisan activity. If the organization recognizes the candidate, it must make sure that:

• There are non-electoral reasons for the candidate to speak
• The individual does not speak as a candidate
• There is no mention of the election or candidacy
• There is no campaign activity
• A nonpartisan atmosphere is maintained, and
• The organization clearly indicates what capacity the candidate appears in and does not refer to the election in announcing his or her attendance.

The three examples relating to permissible appearances note events where a group customarily recognizes officeholders present, invites an elected official to a groundbreaking ceremony during the election season, but makes no reference to the election during the event, and includes current campaigns in an alumni newsletter biography. The impermissible event occurs when the chair of a group sponsoring a concert welcomes the mayor, but goes on to say "We will need his help if we want these concerts to continue next year so please support Mayor G in November as he has supported us."

Issue Advocacy vs. Political Campaign Intervention

The blurry line between advocacy on issues, including criticism of public officials, and support or opposition of candidates was a controversial issue during the IRS's 2004 enforcement program. In this section the IRS states that "501(c)(3) organizations may take positions on public policy issues, including issues that divide candidates in an election for public office…" but "must avoid any issue advocacy that functions as political campaign intervention." It notes that "A communication is particularly at risk of political campaign intervention when it makes reference to candidates or voting in a specific upcoming election. Nevertheless, the communication must still be considered in context before arriving at any conclusions."

The IRS will consider all facts and circumstances to determine which is which, and lists factors that help determine whether a statement is issue advocacy or partisan, examining whether an activity:

• Identifies one or more candidates
• Expresses approval or disapproval of one or more candidates' position on an issue or an action taken
• Is made close to the date of the election or refers to voting and the election
• Raises an issue that distinguishes candidates
• Is part of an ongoing series on the issue that are not timed to the election and
• Is timed to influence an non-electoral event, such as a vote on specific legislation.

The IRS provides three examples:

• Permissible issue advocacy is illustrated by an ad asking the public to "call or write Senator C to tell him to vote for S. 24" because the ad does not mention the election, is tied to legislation that is scheduled for a vote and identifies Senator C as a legislator in a position to vote on the bill.
• Impermissible issue advocacy occurs when a radio ad urges the public to tell the governor, who is also running for re-election, "what you think about our under-funded schools." The ad is not part of a regular series and the Governor's opponent has made education a major issue in the campaign. There is no upcoming legislative activity on the issue.
• The executive director of an organization promoting mass transit intervenes in an election by ending a speech with this statement — "You have the power to relieve the congestion and improve your quality of life in District W. Use that power when you go to the polls and cast your vote in the election for your state senator." In this case the candidates have disagreed strongly on investing in roads vs. transit and the speech occurs a month before the election. It is considered impermissible intervention even though there is no mention of the candidates or a political party.

Voter Guides

The guidance stresses that voter guides must not focus on a narrow range of issues or be structured to reflect bias. It cites key questions for determining if a voter guide violates the prohibition on campaign intervention. These are:

• Are the questions and descriptions of issues clear and unbiased in both structure and content?
• Are the questions in the guide the same as the ones sent to the candidates?
• Do candidates have a reasonable amount of time to respond and explain his or her position in their own words?
• Are the answers those provided by the candidates, unedited and in close proximity to the questions?
• Are all candidates running for an office included?
• Do the questions cover most issues of interest to the electorate as a whole?

The IRS notes that "If the organization's position on one or more issues is set out in the guide so that it can be compared to the candidates' positions, the guide will constitute political campaign intervention." In addition the IRS notes that distribution of biased voter guides prepared by other organizations can still amount to a violation of the ban on partisan activity. No examples are included in this section.

Business Activity

When a charity or religious organization sells or rents mailing lists or leases office space to candidates, or accepts paid political advertising it must consider whether:

• the goods and services are available to all candidates equally, and whether they are available only to candidates and not the general public
• the fees charged are its customary and usual rates, and
• the service is an ongoing activity or is only made available to a particular candidate.

Two examples illustrate permissible and impermissible provision of services to candidates. In the first, when a charity rents a hall for a campaign event at its standard fee on a first come, first served basis it does not support the candidate. In contrast, renting a mailing list to only one candidate and refusing to rent it to others, even when a standard rate is charged, constitutes prohibited support for a candidate.

Web Sites

The IRS notes that statements on web sites will be treated the same as statements made in print. It notes that links to candidate materials are not prohibited intervention if all candidates are represented or there is an exempt purpose served by offering the link. All facts and circumstances will be taken into account. Three examples illustrate the IRS position:

• An online voter guide that presents candidates in a neutral manner and contains links to their websites is permissible.
• A webpage on a charity's site that links to an article relevant to its work on another site, which contains an endorsement on a separate web page, is permissible.
• A posting on a church site urging members to support a fellow parishioner in an upcoming election is impermissible.

Effect of Conducting Multiple Activities

The IRS notes that "Where there is a combination of activities, the interaction among them may affect whether or not the organization is engaged in political campaign intervention."