Transparency In Ministry

IRS Revenue Ruling 2007-41 issued June 1, 2007 examines prohibitions for political campaign intervention by churches, ministries and other charities. The ruling provides scenarios to illustrate considerations that should be made in determining whether a 501(c)3 organization has participated in a political campaign for a candidate running for public office.

Additional information for churches and other exempt organizations is included plus a copy of IRS Publication 1828. If you have any questions, please don't hesitate to contact us.

According to John Pomeranz, partner in the Washington D.C. law firm of Harmon, Curran, Spielberg & Elsenberg, LLP,

the IRS is beginning to agressively pursue 501(c)(3)s if there is any indication of electioneering.

What is electioneering?

Electionneering includes the following:
1. Participating in or intervening in any political campaign on behalf of (or in opposition to) any candidate for public office or
2. Supporting or opposing a candidate for publich office.

Summary...electionneering is participating/intervening in a policity campaign or supporting or opposing a candidate for public office. A 501(c)(3) can't be involved in electionnering or they may risk their exempt status.

As discussed in the previous post, churches may not directly or indirectly participate with a candidate for a political campaign. Contributions to a candidate are prohibited.

This prohibition is not intended to prevent ministers or church leaders from expressing a personal view or bias. The minister, in the exercise of his duties as a minister, cannot endorse a candidate. However, a minister may express his personal views verbally or in writing.

For example:

The senior pastor of XYZ church was interviewed by a local newspaper regarding one of the candidates position on environmental issues. The senior pastor emphasized that his views were personal and did not represent the position of XYZ church or the leadership of XYZ church. Because this interview was not conducted during a church function, documented in a church publication and the minister stressed his personal views, this activity is permitted.

Personal views, stated as such, not expressed in the church setting or in a church publication, are allowed. Ministers have the right to express personal political views, just not in the context of advising or persuading a congregation in his/her role as "the pastor".

Ministers should exercise due care so as not to jeopardize the church’s exempt status.

As we enter another season of political activity, we will address certain political activities that are allowed for churches. In accordance with its exempt status, churches may not directly or indirectly participate with a candidate for a political campaign. However certain activities may be allowed depending on certain facts and circumstances.

Revenue Ruling 74-574 and the IRS’ tax guide for churches and religious organizations, provide guidance on the types of activities that are allowed, including the following:

Churches/ministries may:
1. encourage voters to exercise their constitutional right to vote;

2. provide voter education activities using public events or publishing voter education guides;

3. provide a public forum for all candidates to address the church members;

4. neutral voter registration drives.

The activity must remain non-partisan and unbiased.

The following are examples of allowable activities:

Church XYZ allows Candidate A to speak to the congregation on a Sunday evening, under a non-candidate capacity. The senior pastor has stressed to the candidate that he/she cannot promote his candidacy or his personal political preferences during the speech. No campaign activity occurs.

On a Saturday evening before the local city election, the Church allows a public forum for all the mayoral candidates to address the public. No contributions are paid to any of the candidates and all are allowed equal time to discuss their platform and views. A non-partisan narrator allows questions from the public.

Allowable activities for churches are characterized by non-partisan bias; equal opportunity for all candidates; neutral voter registration and an encouragement to vote.

A church or ministry cannot:

1. express a preference for a designated candidate or group of candidates.

2. contribute to political campaigns

3. make public (verbal or written) statements designating a position

What are the penalties for political activities? Possible revocation or denial of the church’s exempt status and possible excise taxes on political contributions paid.

What kind of political activity is allowed for a minister? See the next post.

On June 1, 2006, the IRS issued a Newswire Release Number IR-2006-087 reminding charities to avoid campaign activities this election season.

Why?

For more information see:
1. IRS Fact Sheet 2006-17, Election Year Activities and hte Prohibition on Political Campaign Intervention for Section 501(c)(3) Organization at http://www.irs.gov/charities/article
2. Procedure for the 2006 Election Season at http://www.irs.gov/pub/irs-tege
3. IRS Publication 1828, Tax Guide for churches and Religious Organization at http://www.irs.gov/pub/irs=pdf/p1828.pdf

Understanding the IRS and these rules are importantant during this election season and in following requirements placed on exempt organizations.