Printable Version Email to a Friend Video transcript, which includes more examples, may be found and downloaded here. Program summary and resources, including fact sheets on permissible election year activities and schedule of exempt organization workshops, can be downloaded from Tax Talk Today website here. |
IRS Program Outlines Rules on Political Intervention by Nonprofits
On March 14, 2006 Internal Revenue Service (IRS) experts joined Tax Talk Today to provide information for section 501(c)(3) charitable organizations on what they can and cannot do when an election campaign is underway. They explained the rules, provided examples to highlight acceptable activity, and discussed the IRS’s Political Activity Compliance Initiative (PACI) for this election year. The program and materials can be downloaded from the web. See more…
Program summary:
The principal rule: 501(c)(3) organizations are prohibited from directly or indirectly participating or intervening in a political campaign on behalf of or in opposition to any particular candidate. This rule applies to electoral intervention, not all activity that could be considered 'political'. For example, nonprofits' lobbying activities are subject to certain limits, but are not prohibited. Referendum advocacy is considered lobbying, not political intervention.
The IRS introduced its Political Activity Compliance Initiative (PACI) in response to growing amounts of money funding political campaigns, and a concern that 501(c)(3)s not become seen as an alternative source of campaign activity. PACI is designed as an enforcement mechanism, and includes 'fast-track' review of organizations that are referred for possible violations. While only a handful of reviewed organizations had their tax-exempt status revoked, and 58 nonprofits were warned and given guidance on how to become compliant.
DO’S:
- Nonprofits can encourage electoral participation — on fair and neutral basis — through Get-Out-The-Vote and voter registration efforts, voter guides, and candidate forums.
- Candidates may be invited to participate in public education forums so long as all candidates in race are invited. Participation may occur over successive weeks, so long as each has same opportunity in equivalent events (i.e. giving sermons on three consecutive Sundays).
- Nonprofits must check the content of all flyers and pamphlets they create and distribute to ensure unbiased nature of information about candidates. Voter guides must cover the full range of issues that candidates would deal with if elected, not only specific subject area of greatest interest to nonprofit.
DON’TS:
- Nonprofits cannot make express endorsements or give candidates preferential access to resources.
- Leaders/spokespeople for nonprofit organizations and religious organizations cannot make political endorsements when serving in role of organization representative (for ministers, neither from pulpit nor in church publications).