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Edited on Mon Nov-23-09 07:46 PM by paulsby
who was a politician. was he not within his rights to do so.
and this issue with denying communion is even MORE clearly within the church's authoritah. if there is one thing a church can do, it is to decide who is and isn't a member, who is and isn't able to take part in sacred rituals, etc.
you have a candidate who is an open opponent of the catholic church's policy on abortion (which i happen to disagree with, but that's irrelevant). a local leader of that church speaks up about denying him communion? imo, and the case law will back me up on this, that is NOT a violation of the rules of their tax exempt status
anyway, i get the sneaking suspicion that the VAST majority of people have not even READ the relevant law. so, let me quote an IRS manual on tax exemption for churches and what jeapordizes it. for example, some say churches cannot attempt to influence legislation. yes, they can. god knows MLK's church and the SCLC did. i suggest people read this helpful IRS manual.
All IRC section 501(c)(3) organizations, including churches and religious organizations, must abide by certain rules:■ their net earnings may not inure to any privateshareholder or individual,■ they must not provide a substantial benefit to privateinterests,■ they must not devote a substantial part of theiractivities to attempting to influence legislation,■ they must not participate in, or intervene in, anypolitical campaign on behalf of (or in opposition to)any candidate for public office, and■ the organization’s purposes and activities may notbe illegal or violate fundamental public policy.Inurement and Private BenefitInurement to InsidersChurches and religious organizations, like all exemptorganizations under IRC section 501(c)(3), are prohibited from engaging in activities that result in inurement ofthe church’s or organization’s income or assets to insiders(i.e., persons having a personal and private interest in theactivities of the organization). Insiders could include theminister, church board members, officers, and in certaincircumstances, employees. Examples of prohibited inurement include the payment of dividends, the payment ofunreasonable compensation to insiders, and transferringproperty to insiders for less than fair market value. Theprohibition against inurement to insiders is absolute;therefore, any amount of inurement is, potentially,grounds for loss of tax-exempt status. In addition, theinsider involved may be subject to excise tax. See thefollowing section on Excess benefit transactions. Notethat prohibited inurement does not include reasonablepayments for services rendered, payments that furthertax-exempt purposes, or payments made for the fairmarket value of real or personal property.Excess benefit transactions. In cases where an IRCsection 501(c)(3) organization provides an excess economic benefit to an insider, both the organization andthe insider have engaged in an excess benefit transaction.The IRS may impose an excise tax on any insider whoimproperly benefits from an excess benefit transaction,as well as on organization managers who participate insuch a transaction knowing that it is improper. An insiderwho benefits from an excess benefit transaction is alsorequired to return the excess benefits to the organization. Detailed rules on excess benefit transactions arecontained in the Code of Federal Regulations, Title 26,sections 53.4958-0 through 53.4958-8.Private BenefitAn IRC section 501(c)(3) organization’s activities mustbe directed exclusively toward charitable, educational,religious, or other exempt purposes. Such an organization’s activities may not serve the private interests of anyindividual or organization. Rather, beneficiaries of anorganization’s activities must be recognized objects ofcharity (such as the poor or the distressed) or the community at large (for example, through the conduct ofreligious services or the promotion of religion). Privatebenefit is different from inurement to insiders. Privatebenefit may occur even if the persons benefited are notinsiders. Also, private benefit must be substantial inorder to jeopardize tax-exempt status.Substantial Lobbying ActivityIn general, no organization, including a church, mayqualify for IRC section 501(c)(3) status if a substantialpart of its activities is attempting to influence legislation (commonly known as lobbying). An IRC section501(c)(3) organization may engage in some lobbying, buttoo much lobbying activity risks loss of tax-exempt status.5 -------------------------------------------------------------------------------- Page 8 Legislation includes action by Congress, any state legislature, any local council, or similar governing body, withrespect to acts, bills, resolutions, or similar items (such aslegislative confirmation of appointive offices), or by thepublic in a referendum, ballot initiative, constitutionalamendment, or similar procedure. It does not includeactions by executive, judicial, or administrative bodies.A church or religious organization will be regarded asattempting to influence legislation if it contacts, or urgesthe public to contact, members or employees of a legislative body for the purpose of proposing, supporting, oropposing legislation, or if the organization advocates theadoption or rejection of legislation.Churches and religious organizations may, however,involve themselves in issues of public policy withoutthe activity being considered as lobbying. For example,churches may conduct educational meetings, prepareand distribute educational materials, or otherwise consider public policy issues in an educational manner withoutjeopardizing their tax-exempt status.Measuring Lobbying ActivitySubstantial part test. Whether a church’s or religiousorganization’s attempts to influence legislation constitutea substantial part of its overall activities is determinedon the basis of all the pertinent facts and circumstancesin each case. The IRS considers a variety of factors,including the time devoted (by both compensated andvolunteer workers) and the expenditures devoted by theorganization to the activity, when determining whetherthe lobbying activity is substantial. Churches must usethe substantial part test since they are not eligible to usethe expenditure test described in the next section.Consequences of excessive lobbying activity. Under the substantialpart test, a church or religious organization that conducts excessivelobbying activity in any taxable year may lose its tax-exempt status,resulting in all of its income being subject to tax. In addition, areligious organization is subject to an excise tax equal to five percent of its lobbying expenditures for the year in which it ceases toqualify for exemption. Further, a tax equal to five percent of thelobbying expenditures for the year may be imposed against organization managers, jointly and severally, who agree to the making ofsuch expenditures knowing that the expenditures would likely resultin loss of tax-exempt status.Expenditure test. Although churches are not eligible,religious organizations may elect the expenditure testunder IRC section 501(h) as an alternative method formeasuring lobbying activity. Under the expenditure test,the extent of an organization’s lobbying activity will notjeopardize its tax-exempt status, provided its expenditures, related to such activity, do not normally exceed anamount specified in IRC section 4911. This limit is generally based upon the size of the organization and maynot exceed $1,000,000.Religious organizations electing to use the expendituretest must file IRS Form 5768, Election/Revocation ofElection by an Eligible IRC Section 501(c)(3) OrganizationTo Make Expenditures To Influence Legislation, at anytime during the tax year for which it is to be effective.The election remains in effect for succeeding yearsunless it is revoked by the organization. Revocation ofthe election is effective beginning with the year followingthe year in which the revocation is filed. Religious organizations may wish to consult their tax advisors to determine their eligibility for, and the advisability of, electingthe expenditure test.Consequences of excessive lobbying activity. Under the expendituretest, a religious organization that engages in excessive lobbyingactivity over a four-year period may lose its tax-exempt status, making all of its income for that period subject to tax. Should the organization exceed its lobbying expenditure dollar limit in a particularyear, it must pay an excise tax equal to 25 percent of the excess.6 -------------------------------------------------------------------------------- Page 9 Political Campaign ActivityUnder the Internal Revenue Code, all IRC section501(c)(3) organizations, including churches and religiousorganizations, are absolutely prohibited from directly orindirectly participating in, or intervening in, any politicalcampaign on behalf of (or in opposition to) any candidatefor elective public office. Contributions to political campaign funds or public statements of position (verbal orwritten) made by or on behalf of the organization in favorof or in opposition to any candidate for public officeclearly violate the prohibition against political campaignactivity. Violation of this prohibition may result in denialor revocation of tax-exempt status and the imposition ofcertain excise tax.Certain activities or expenditures may not be prohibiteddepending on the facts and circumstances. For example,certain voter education activities (including the presentation of public forums and the publication of voter education guides) conducted in a non-partisan manner donot constitute prohibited political campaign activity. Inaddition, other activities intended to encourage people toparticipate in the electoral process, such as voter registration and get-out-the-vote drives, would not constituteprohibited political campaign activity if conducted in anon-partisan manner. On the other hand, voter educationor registration activities with evidence of bias that: (a)would favor one candidate over another; (b) opposea candidate in some manner; or (c) have the effect offavoring a candidate or group of candidates, will constitute prohibited participation or intervention.Individual Activity by Religious LeadersThe political campaign activity prohibition is notintended to restrict free expression on political mattersby leaders of churches or religious organizations speaking for themselves, as individuals. Nor are leaders prohibited from speaking about important issues of publicpolicy. However, for their organizations to remain taxexempt under IRC section 501(c)(3), religious leaderscannot make partisan comments in official organizationpublications or at official church functions. To avoidpotential attribution of their comments outside of churchfunctions and publications, religious leaders who speakor write in their individual capacity are encouraged toclearly indicate that their comments are personal and notintended to represent the views of the organization. Thefollowing are examples of situations involving endorsements by religious leaders.Example 1: Minister A is the minister of Church J, a section501(c)(3) organization, and is well known in the community. Withtheir permission, Candidate T publishes a full-page ad in the localnewspaper listing five prominent ministers who have personallyendorsed Candidate T, including Minister A. Minister A is identified in the ad as the minister of Church J. The ad states, “Titlesand affiliations of each individual are provided for identificationpurposes only.” The ad is paid for by Candidate T’s campaign committee. Since the ad was not paid for by Church J, the ad is nototherwise in an official publication of Church J, and the endorsement is made by Minister A in a personal capacity, the ad does notconstitute campaign intervention by Church J.Example 2: Minister B is the minister of Church K, a section501(c)(3) organization, and is well known in the community. Three weeks before the election, he attends a press conference atCandidate V's campaign headquarters and states that CandidateV should be reelected. Minister B does not say he is speaking onbehalf of Church K. His endorsement is reported on the frontpage of the local newspaper and he is identified in the article asthe minister of Church K. Because Minister B did not make theendorsement at an official church function, in an official churchpublication or otherwise use the church's assets, and did not statethat he was speaking as a representative of Church K, his actionsdo not constitute campaign intervention by Church K.7 -------------------------------------------------------------------------------- Page 10 Example 3: Minister C is the minister of Church I, a section501(c)(3) organization. Church I publishes a monthly churchnewsletter that is distributed to all church members. In each issue,Minister C has a column titled “My Views.” The month before theelection, Minister C states in the “My Views” column, “It is mypersonal opinion that Candidate U should be reelected.” For thatone issue, Minister C pays from his personal funds the portion ofthe cost of the newsletter attributable to the “My Views” column.Even though he paid part of the cost of the newsletter, the newsletter is an official publication of the church. Because the endorsement appeared in an official publication of Church I, it constitutescampaign intervention attributed to Church I.Example 4: Minister D is the minister of Church M, a section501(c)(3) organization. During regular services of Church M shortlybefore the election, Minister D preached on a number of issues,including the importance of voting in the upcoming election, andconcluded by stating, “It is important that you all do your dutyin the election and vote for Candidate W.” Because Minister D’sremarks indicating support for Candidate W were made during anofficial church service, they constitute political campaign intervention by to Church M.Issue Advocacy vs. Political Campaign InterventionLike other section 501(c)(3) organizations, somechurches and religious organizations take positionson public policy issues, including issues that dividecandidates in an election for public office. However,section 501(c)(3) organizations must avoid anyissue advocacy that functions as political campaignintervention. Even if a statement does not expressly tellan audience to vote for or against a specific candidate,an organization delivering the statement is at risk ofviolating the political campaign intervention prohibitionif there is any message favoring or opposing a candidate.A statement can identify a candidate not only by statingthe candidate’s name but also by other means such asshowing a picture of the candidate, referring to politicalparty affiliations, or other distinctive features of acandidate’s platform or biography. All the facts andcircumstances need to be considered to determine if theadvocacy is political campaign intervention.Key factors in determining whether a communicationresults in political campaign intervention include thefollowing:■ whether the statement identifies one or more candidates for a given public office,■ whether the statement expresses approval or disapproval for one or more candidates’ positions and/oractions,■ whether the statement is delivered close in time to theelection,■ whether the statement makes reference to voting or anelection,■ whether the issue addressed in the communication hasbeen raised as an issue distinguishing candidates for agiven office,■ whether the communication is part of an ongoingseries of communications by the organization on thesame issue that are made independent of the timing ofany election, and■ whether the timing of the communication and identification of the candidate are related to a non-electoralevent such as a scheduled vote on specific legislation byan officeholder who also happens to be a candidate forpublic office.A communication is particularly at risk of political campaign intervention when it makes reference to candidatesor voting in a specific upcoming election. Nevertheless,the communication must still be considered in contextbefore arriving at any conclusions.Example 1: Church O, a section 501(c)(3) organization, preparesand finances a full page newspaper advertisement that is publishedin several large circulation newspapers in State V shortly before anelection in which Senator C is a candidate for nomination in a partyprimary. Senator C is the incumbent candidate in a party primary. The advertisement states that a pending bill in the United StatesSenate would provide additional opportunities for State V residents to participate in faith-based programs by providing fundingto such church-affiliated programs. The advertisement ends withthe statement “Call or write Senator C to tell him to vote for this8 -------------------------------------------------------------------------------- Page 11 bill, despite his opposition in the past.” Funding for faith-based programs has not been raised as an issue distinguishing Senator C from any opponent. The bill is scheduled for a vote before the election. The advertisement identifies Senator C’s position as contrary to O’s position. Church O has not violated the political campaign intervention prohibition: The advertisement does not mention the election or the candidacy of Senator C or distinguish Senator C from any opponent. The timing of the advertising and the identification of Senator C are directly related to a vote on the identified legislation. The candidate identified, Senator C, is an officeholder who is in a position to vote on the legislation. Example 2: Church R, a section 501(c)(3) organization, preparesand finances a radio advertisement urging an increase in state funding for faith-based education in State X, which requires a legislative appropriation. Governor E is the governor of State X. Theradio advertisement is first broadcast on several radio stations inState X beginning shortly before an election in which Governor Eis a candidate for re-election. The advertisement is not part of anongoing series of substantially similar advocacy communications byChurch R on the same issue. The advertisement cites numerousstatistics indicating that faith-based education in State X is underfunded. Although the advertisement does not say anything aboutGovernor E’s position on funding for faith-based education, it endswith “Tell Governor E what you think about our under-fundedschools.” In public appearances and campaign literature, GovernorE’s opponent has made funding of faith-based education an issuein the campaign by focusing on Governor E’s veto of an income taxincrease to increase funding for faith-based education. At the timethe advertisement is broadcast, no legislative vote or other majorlegislative activity is scheduled in the State X legislature on statefunding of faith-based education. Church R has violated the political campaign prohibition: The advertisement identifies GovernorE, appears shortly before an election in which Governor E is acandidate, is not part of an ongoing series of substantially similaradvocacy communications by Church R on the same issue, is nottimed to coincide with a non-election event such as a legislativevote or other major legislative action on that issue, and takes a position on an issue that the opponent has used to distinguish himselffrom Governor E.Example 3: Candidate A and Candidate B are candidates for thestate senate in District W of State X. The issue of State X fundingfor a faith-based indigent hospital care in District W is a prominent issue in the campaign. Both candidates have spoken out onthe issue. Candidate A supports funding such care; Candidate Bopposes the project and supports increasing State X funding forpublic hospitals instead. P is the head of the board of elders atChurch C, a section 501(c)(3) organization located in District W.At C’s annual fundraising dinner in District W, which takes placein the month before the election, P gives a long speech abouthealth care issues, including the issue of funding for faith-basedprograms. P does not mention the name of any candidate or anypolitical party. However, at the end of the speech, P makes thefollowing statement, “For those of you who care about quality oflife in District W and the desire of our community for health careresponsive to their faith, there is a very important choice comingup next month. We need more funding for health care. Increasedpublic hospital funding will not make a difference. You have thepower to respond to the needs of this community. Use that powerwhen you go to the polls and cast your vote in the election for yourstate senator.” C has violated the political campaign interventionprohibition as a result of P’s remarks at C’s official function shortlybefore the election, in which P referred to the upcoming electionafter stating a position on an issue that is a prominent issue in acampaign that distinguishes the candidates.Inviting a Candidate to SpeakDepending on the facts and circumstances, a church orreligious organization may invite political candidates tospeak at its events without jeopardizing its tax-exemptstatus. Political candidates may be invited in their capacity as candidates, or individually (not as a candidate).Candidates may also appear without an invitation atorganization events that are open to the public.9 -------------------------------------------------------------------------------- Page 12 Speaking as a candidate. Like any other IRC section501(c)(3) organization, when a candidate is invited tospeak at a church or religious organization event as apolitical candidate, factors in determining whether theorganization participated or intervened in a politicalcampaign include the following:■ whether the church provides an equal opportunity tothe political candidates seeking the same office,■ whether the church indicates any support of or opposition to the candidate. (This should be stated explicitlywhen the candidate is introduced and in communicationsconcerning the candidate’s appearance.)■ whether any political fundraising occurs,■ whether the individual is chosen to speak solely forreasons other than candidacy for public office,■ whether the organization maintains a nonpartisanatmosphere on the premises or at the event where thecandidate is present, and■ whether the organization clearly indicates the capacityin which the candidate is appearing and does not mention the individual's political candidacy or the upcomingelection in the communications announcing the candidate's attendance at the event.Equal opportunity to participate. Like any otherIRC section 501(c)(3) organization, in determiningwhether candidates are given an equal opportunity toparticipate, a church or religious organization shouldconsider the nature of the event to which each candidateis invited, in addition to the manner of presentation. Forexample, a church or religious organization that invitesone candidate to speak at its well attended annual banquet, but invites the opposing candidate to speak at asparsely attended general meeting, will likely be foundto have violated the political campaign prohibition,even if the manner of presentation for both speakersis otherwise neutral.Public forum. Sometimes a church or religiousorganization invites several candidates to speak at apublic forum. A public forum involving several candidates for public office may qualify as an exempt educational activity. However, if the forum is operated to showa bias for or against any candidate, then the forum wouldbe prohibited campaign activity, as it would be considered intervention or participation in a political campaign.When an organization invites several candidates to speakat a forum, it should consider the following factors:■ whether questions for the candidate are prepared andpresented by an independent nonpartisan panel,■ whether the topics discussed by the candidates cover abroad range of issues that the candidates would addressif elected to the office sought and are of interest to thepublic,■ whether each candidate is given an equal opportunityto present his or her views on the issues discussed,■ whether the candidates are asked to agree or disagreewith positions, agendas, platforms or statements of theorganization, and■ whether a moderator comments on the questionsor otherwise implies approval or disapproval of thecandidates.A candidate may seek to reassure the organization thatit is permissible for the organization to do certain thingsin connection with the candidate’s appearance. An organization in this position should keep in mind that thecandidate may not be familiar with the organization’stax-exempt status and that the candidate may be focusedon compliance with the election laws that apply to thecandidate’s campaign rather than the federal tax law thatapplies to the organization. The organization will be inthe best position to ensure compliance with the prohibition on political campaign intervention if it makes itsown independent conclusion about its compliance withfederal tax law.The following are examples of situations where a churchor religious organization invites a candidate(s) to speakbefore the congregation.10 -------------------------------------------------------------------------------- Page 13 Example 1: Minister E is the minister of Church N, a section501(c)(3) organization. In the month prior to the election, MinisterE invited the three Congressional candidates for the district inwhich Church N is located to address the congregation, one eachon three successive Sundays, as part of regular worship services.Each candidate was given an equal opportunity to address andfield questions on a wide variety of topics from the congregation.Minister E’s introduction of each candidate included no commentson their qualifications or any indication of a preference for any candidate. The actions do not constitute political campaign intervention by Church N.Example 2: The facts are the same as in the preceding exampleexcept that there are four candidates in the race rather than three,and one of the candidates declines the invitation to speak. In thepublicity announcing the dates for each of the candidate’s speeches,Church N includes a statement that the order of the speakerswas determined at random and the fourth candidate declined thechurch’s invitation to speak. Minister E makes the same statementin his opening remarks at each of the meetings where one of thecandidates is speaking. Church N’s actions do not constitute political campaign intervention.Example 3: Minister F is the minister of Church O, a section501(c)(3) organization The Sunday before the November election,Minister F invited Senate Candidate X to preach to her congregation during worship services. During his remarks, Candidate Xstated, “I am asking not only for your votes, but for your enthusiasm and dedication, for your willingness to go the extra mile to geta very large turnout on Tuesday.” Minister F invited no other candidate to address her congregation during the Senatorial campaign.Because these activities took place during official church services,they are attributed to Church O. By selectively providing churchfacilities to allow Candidate X to speak in support of his campaign,Church O’s actions constitute political campaign intervention.Speaking as a non-candidate. Like any other IRCsection 501(c)(3) organization, a church or religiousorganization may invite political candidates (includingchurch members) to speak in a non-candidate capacity.For instance, a political candidate may be a public figurebecause he or she: (a) currently holds, or formerly held,public office; (b) is considered an expert in a non-political field; or (c) is a celebrity or has led a distinguishedmilitary, legal, or public service career. A candidate maychoose to attend an event that is open to the public, suchas a lecture, concert or worship service. The candidate'spresence at a church-sponsored event does not, byitself, cause the organization to be involved in politicalcampaign intervention. However, if the candidate ispublicly recognized by the organization, or if the candidate is invited to speak, factors in determining whetherthe candidate's appearance results in political campaignintervention include the following:■ whether the individual speaks only in a non-candidatecapacity,■ whether either the individual nor any representative ofthe church makes any mention of his or her candidacy orthe election,■ whether any campaign activity occurs in connectionwith the candidate’s attendance.■ whether the individual is chosen to speak solely forreasons other than candidacy for public office,■ whether the organization maintains a nonpartisanatmosphere on the premises or at the event where thecandidate is present, and■ whether the organization clearly indicates the capacityin which the candidate is appearing and does not mention the individual's political candidacy or the upcomingelection in the communications announcing the candidate's attendance at the event.In addition, the church or religious organization shouldclearly indicate the capacity in which the candidate isappearing and should not mention the individual’s political candidacy or the upcoming election in the communications announcing the candidate’s attendance at the event.11 . -------------------------------------------------------------------------------- Page 14 Below are examples of situations where a public officialappears at a church or religious organization in an officialcapacity, and not as a candidate.Example 1: Church P, a section 501(c)(3) organization, is locatedin the state capital. Minister G customarily acknowledges thepresence of any public officials present during services. Duringthe state gubernatorial race, Lieutenant Governor Y, a candidate,attended a Wednesday evening prayer service in the church.Minister G acknowledged the Lieutenant Governor’s presence inhis customary manner, saying, “We are happy to have worshipingwith us this evening Lieutenant Governor Y.” Minister G made noreference in his welcome to the Lieutenant Governor’s candidacy orthe election. Minister G’s actions do not constitute political campaignintervention by Church P.Example 2: Minister H is the minister of Church Q, a section501(c)(3) organization. Church Q is building a community center.Minister H invites Congressman Z, the representative for the district containing Church Q, to attend the groundbreaking ceremonyfor the community center. Congressman Z is running for reelectionat the time. Minister H makes no reference in her introduction toCongressman Z’s candidacy or the election. Congressman Z alsomakes no reference to his candidacy or the election and does notdo any fundraising while at Church Q. Church Q has not intervened in a political campaign.Example 3: Church X is a section 501(c)(3) organization. X publishes a member newsletter on a regular basis. Individual churchmembers are invited to send in updates about their activities whichare printed in each edition of the newsletter. After receiving anupdate letter from Member Q, X prints the following: “Member Qis running for city council in Metropolis.” The newsletter does notcontain any reference to this election or to Member Q’s candidacyother than this statement of fact. Church X has not intervened in apolitical campaign.Example 4: Mayor G attends a concert performed by a choir ofChurch S, a section 501(c)(3) organization, in City Park. The concert is free and open to the public. Mayor G is a candidate for reelection, and the concert takes place after the primary and beforethe general election. During the concert, S’s minister addressesthe crowd and says, “I am pleased to see Mayor G here tonight.Without his support, these free concerts in City Park would not bepossible. We will need his help if we want these concerts to continue next year so please support Mayor G in November as he hassupported us.” As a result of these remarks, Church S has engagedin political campaign intervention.Voter Education, Voter Registration and Get-Outthe-Vote DrivesSection 501(c)(3) organizations are permitted to conductcertain voter education activities (including the presentation of public forums and the publication of voter education guides) if they are carried out in a non-partisanmanner. In addition, section 501(c)(3) organizations mayencourage people to participate in the electoral processthrough voter registration and get-out-the-vote drives,conducted in a non-partisan manner. On the other hand,voter education or registration activities conducted in abiased manner that favors (or opposes) one or more candidates is prohibited.Like other IRC section 501(c)(3) organizations, somechurches and religious organizations undertake votereducation activities by distributing voter guides. Voterguides, generally, are distributed during an electioncampaign and provide information on how all candidatesstand on various issues. These guides may be distributedwith the purpose of educating voters; however, they maynot be used to attempt to favor or oppose candidates forpublic elected office.A careful review of the following facts and circumstancesmay help determine whether or not a church or religiousorganization’s publication or distribution of voter guidesconstitutes prohibited political campaign activity:■ whether the candidates’ positions are compared to theorganization’s position,■ whether the guide includes a broad range of issuesthat the candidates would address if elected to theoffice sought,■ whether the description of issues is neutral,12 -------------------------------------------------------------------------------- Page 15 ■ whether all candidates for an office are included, and■ whether the descriptions of candidates’ positionsare either:- the candidates’ own words in response to questions, or- a neutral, unbiased and complete compilation of allcandidates’ positions.The following are examples of church voter educationand voter registration activities.Example 1: Church R, a section 501(c)(3) organization, distributesa voter guide prior to elections. The voter guide consists of a briefstatement from the candidates on each issue made in response toa questionnaire sent to all candidates for governor of State I. Theissues on the questionnaire cover a wide variety of topics and wereselected by Church R based solely on their importance and interest to the electorate as a whole. Neither the questionnaire nor thevoter guide, through their content or structure, indicate a bias orpreference for any candidate or group of candidates. Church R isnot participating or intervening in a political campaign.Example 2: Church S, a section 501(c)(3) organization, distributesa voter guide during an election campaign. The voter guide isprepared using the responses of candidates to a questionnaire sentto candidates for major public offices. Although the questionnairecovers a wide range of topics, the wording of the questions evidences a bias on certain issues. By using a questionnaire structuredin this way, Church S is parti-cipating or intervening in a politicalcampaign.Example 3: Church T, a section 501(c)(3) organization, sets up abooth at the state fair where citizens can register to vote. Thesigns and banners in and around the booth give only the name ofthe church, the date of the next upcoming statewide election, andnotice of the opportunity to register. No reference to any candidate or political party is made by volunteers staffing the booth orin the materials available in the booth, other than the official voterregistration forms which allow registrants to select a party affiliation. Church T is not engaged in political campaign interventionwhen it operates this voter registration booth.Example 4: Church C is a section 501(c)(3) organization. C’sactivities include educating its members on family issues involvingmoral values. Candidate G is running for state legislature and animportant element of her platform is challenging the incumbent’sposition on family issues. Shortly before the election, C sets upa telephone bank to call registered voters in the district in whichCandidate G is seeking election. In the phone conversations, C’srepresentative tells the voter about the moral importance of familyissues and asks questions about the voter’s views on these issues. Ifthe voter appears to agree with the incumbent’s position, C’s representative thanks the voter and ends the call. If the voter appears toagree with Candidate G’s position, C’s representative reminds thevoter about the upcoming election, stresses the importance of voting in the election and offers to provide transportation to the polls.C is engaged in political campaign intervention when it conductsthis get-out-the-vote drive.Business ActivityThe question of whether an activity constitutes participation or intervention in a political campaign may alsoarise in the context of a business activity of the churchor religious organization, such as the selling or rentingof mailing lists, the leasing of office space, or the acceptance of paid political advertising. (The tax treatment ofincome from such unrelated business activities follows.)In this context, some of the factors to be considered indetermining whether the church or religious organization has engaged in prohibited political campaign activityinclude the following:■ whether the good, service, or facility is available to thecandidates on an equal basis,■ whether the good, service, or facility is available onlyto candidates and not to the general public,■ whether the fees charged are at the organization’scustomary and usual rates, and■ whether the activity is an ongoing activity of the organization or whether it is conducted only for the candidate.13 -------------------------------------------------------------------------------- Page 16 Example 1: Church K is a section 501(c)(3) organization. It ownsa building that has a large basement hall suitable for hosting dinners and receptions. For several years, Church K has made thehall available for rent to members of the public. It has standardfees for renting the hall based on the number of people in attendance, and a number of different organizations have rented thehall. Church K rents the hall on a first come, first served basis.Candidate P’s campaign pays the standard fee for the dinner.Church K is not involved in political campaign intervention as aresult of renting the hall to Candidate P for use as the site of acampaign fundraising dinner.Example 2: Church L is a section 501(c)(3) organization. It maintains a mailing list of all of its members. Church L has neverrented the mailing list to a third party. The campaign committeeof Candidate Q, who supports funding for faith-based programs,approaches Church L. Candidate A’s campaign committee offersto rent Church L’s mailing list for a fee that is comparable to feescharged by other similar organizations. Church L rents the list toCandidate A’s campaign committee, but declines similar requestsfrom campaign committees of other candidates. Church L hasintervened in a political campaign.Web Sites: The Internet has become a widely usedcommunications tool. Section 501(c)(3) organizationsuse their own web sites to disseminate statements andinformation. They also routinely link their web sites toweb sites maintained by other organizations as a way ofproviding additional information that the organizationsbelieve is useful or relevant to the public.A web site is a form of communication. If an organization posts something on its web site that favors or opposes a candidate for public office, the organization will betreated the same as if it distributed printed material, oralstatements or broadcasts that favored or opposed a candidate.An organization has control over whether it establishes alink to another site. When an organization establishes alink to another web site, the organization is responsiblefor the consequences of establishing and maintainingthat link, even if the organization does not have controlover the content of the linked site. Because the linkedcontent may change over time, an organization mayreduce the risk of political campaign intervention bymonitoring the linked content and adjusting the linksaccordingly.Links to candidate-related material, by themselves, donot necessarily constitute political campaign intervention. All the facts and circumstances must be taken intoaccount when assessing whether a link produces thatresult. The facts and circumstances to be consideredinclude, but are not limited to, the context for the linkon the organization’s web site, whether all candidates arerepresented, any exempt purpose served by offering thelink, and the directness of the links between the organization’s web site and the web page that contains materialfavoring or opposing a candidate for public office.Example 1. Church P, a section 501(c)(3) organization, maintains aweb site that includes such information as biographies of its ministers, times of services, details of community outreach programs,and activities of members of its congregation. B, a member of thecongregation of Church P, is running for a seat on the town council.Shortly before the election, Church P posts the following messageon its web site, “Lend your support to B, your fellow parishioner, inTuesday’s election for town council.” Church P has intervened in apolitical campaign on behalf of B.Example 2. Church N, a section 501(c)(3) organization, maintainsa web site that includes such information as staff listings, directions to the church, and descriptions of its community outreachprograms, schedules of services, and school activities. On one pageof the web site, Church N describes a particular type of treatmentprogram for homeless veterans. This section includes a link to anarticle on the web site of O, a major national newspaper, praisingChurch N’s treatment program for homeless veterans. The pagecontaining the article on O’s web site does not refer to any candidate or election and has no direct links to candidate or electioninformation. Elsewhere on O’s web site, there is a page displayingeditorials that O has published. Several of the editorials endorsecandidates in an election that has not yet occurred. Church N hasnot intervened in a political campaign by maintaining a link on O’s14 -------------------------------------------------------------------------------- Page 17 web site because the link is provided for the exempt purpose ofeducating the public about its programs; the context for the link,the relationship between Church N and O, and the arrangementof the links going from Church N’s web site to the endorsementon O’s web site, do not indicate that Church N was favoring oropposing any candidate.Example 3: Church M, a section 501(c)(3) organization, maintainsa web site and posts an unbiased, nonpartisan voter guide that isprepared in accordance with the principles discussed on pages 12and 13 of this publication. For each candidate covered in the voterguide, M includes a link to that candidate’s official campaign website. The links to the candidate web sites are presented on a consistent, neutral basis for each candidate, with text saying “For moreinformation on Candidate X, you may consult .” M has notintervened in a political campaign because the links are providedfor the exempt purpose of educating voters and are presented in aneutral, unbiased manner that includes all candidates for a particular office.Consequences of Political Campaign ActivityWhen it participates in political campaign activity, achurch or religious organization jeopardizes both itstax-exempt status under IRC section 501(c)(3) and itseligibility to receive tax-deductible contributions. Inaddition, it may become subject to an excise tax on itspolitical expenditures. This excise tax may be imposedin addition to revocation, or it may be imposed insteadof revocation. Also, the church or religious organizationshould correct the violation.Excise tax. An initial tax is imposed on an organizationat the rate of 10 percent of the political expenditures.Also, a tax at the rate of 2.5 percent of the expendituresis imposed against the organization managers (jointly andseverally) who, without reasonable cause, agreed to theexpenditures knowing they were political expenditures.The tax on management may not exceed $5,000 withrespect to any one expenditure.In any case in which an initial tax is imposed against anorganization, and the expenditures are not correctedwithin the period allowed by law, an additional tax equalto 100 percent of the expenditures is imposed againstthe organization. In that case, an additional tax is alsoimposed against the organization managers (jointly andseverally) who refused to agree to make the correction.The additional tax on management is equal to 50 percentof the expenditures and may not exceed $10,000 withrespect to any one expenditure.Correction. Correction of a political expenditurerequires the recovery of the expenditure, to the extentpossible, and establishment of safeguards to preventfuture political expenditures.Please note that a church or religious organization thatengages in any political campaign activity also needs todetermine whether it is in compliance with the appropriate federal, state or local election laws, as these may differ from the requirements under IRC section 501(c)(3).15 --------------------------------------------------------------------------------
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