By: James Guinn
Many times, especially in a major election year, churches and religious organizations have a tendency to want to become involved in the political process. Under certain circumstances some activity is permissible. However, involvement in these areas may be a very “dangerous” area for Internal Revenue Code Section 501(c)(3) organizations.
Internal Revenue Code Section 501(c)(3) precludes exemption for an organization which participates or intervenes in (including the publishing or distributing of statements) any political campaigns on behalf of any candidate for public office.
The first point to be noted is that this is an absolute prohibition. The intervention does not have to be substantial in terms of time or money to cause loss of exemption. Since there is no definitive rule, any intervention could result in loss of the organization’s exempt status and denial of deductions to donor for gift, estate and income tax purposes. Regulations state that intervention in campaigns includes, but is not limited to, the making of oral statements or the publishing of written statements for or against any candidate.
Pertinent sections of revenue ruling 78-248 are quoted to illustrate the IRS position regarding political intervention, as follows:
“Whether an organization is participating or intervening, directly or indirectly, in any political campaign on behalf of or in opposition to any candidate for public office depends upon all of the facts and circumstances of each case. Certain ‘voter education’ activities conducted in a non-partisan manner may not constitute prohibited political activity under section 501(c)(3) of the code.
Other so-called voter education activities, however, may be proscribed by the statute. The following situations are illustrative:
“Situation 1-Organization A has been recognized as exempt under section 501(c)(3) of the code by the Internal Revenue Service. As one of its activities, the organization annually prepares and makes generally available to the public a compilation of voting records of all Members of Congress on major legislative issues involving a wide range of subjects. The publication contains no editorial opinion, and its contents and structure do not imply approval or disapproval of any members of their voting records.
“The voter education activity of Organization A is not prohibited political activity within the meaning of section 501(c)(3) of the code.
“Situation 2-Organization B has been recognized as exempt under section 501(c)(3) of the code by the Internal Revenue Service. As one of its activities in election years, it sends a questionnaire to all candidates for governor in State M. The questionnaire solicits a brief statement of each candidate’s position on a wide variety of issues. All responses are published in a voter’s guide that it makes generally available to the public. The issues covered are selected by the organization solely on the basis of their importance and interest to the electorate as a whole. Neither the questionnaire nor the voter’s guide, in content or structure, evidences a bias or preference with respect to the views of any candidate or group of candidates.
“The voter education activities of Organization B are not prohibited political activity within the meaning of section 501(c)(3) of the code.
“Situation 3-Organization C has been recognized as exempt under section 501(c)(3) of the code by the Internal Revenue Service. Organization C undertakes a voter education activity patterned after that of Organization B in situation 2. It sends a questionnaire to candidates for major public offices and uses the responses to prepare a voter’s guide which is distributed during an election campaign. Some questions evidence a bias on certain issues. By using a questionnaire structured in this way, Organization C is participating in a political campaign in contravention of the provisions of section 501(c)(3) and is disqualified as exempt under that section.”
An additional situation is as follows:
A church publishes a magazine in which the views of opposing candidates for a political office are printed. Items that could be interpreted to be intervention are:
1. Prominence is given to one candidate over the other by a magazine article location, use of color, photos, typesetting, etc.
2. Not all candidates for the office are given space in the magazine.
3. Prior and subsequent oral statements by church leaders, with regard to issues discussed in a church magazine by a particular candidate, that would indicate the “favored” candidate.
For example, two candidates’ views regarding abortion are printed, one is pro-abortion and one is anti-abortion. If the church leader then makes oral statements that biblical teaching is anti-abortion, then the church has pinpointed the candidate for which the members should vote, and could be construed to be intervening in political campaigns.
Many religious leaders at times “walk a tightrope” with regard to political intervention, especially in the area of oral statements. However, it is a dangerous gamble with the stakes being loss of exempt status.
The more appropriate approach in light of IRS regulations is to urge church members and followers to vote their conscience after becoming educated about the candidates and prayerfully matching their views with God’s Word.
James Guinn is a certified public accountant with the firm Guinn, Smith & Company in Irving, Texas, a firm that has provided C.P.A. services to over 250 religious organizations, helping more than 100 non-profit corporations receive tax-exempt status from the Internal Revenue Service.
Guinn earned a bachelor of business administration degree from Midwestern State University in Wichita Falls, Texas, and worked for Arthur Andersen & Company, one
of the largest international public accounting firms.
(The above material originally appeared in Ministries Magazine.)
Christian Information Network