IRS renews Political Activities Compliance Initiative for 2008 election year

The IRS has announced that it will renew its Political Activities Compliance Initiative for the 2008 election season.  This program seeks to make Code Sec. 501(c)(3) tax-exempt organizations (churches, charities, etc.) more aware of the restrictions on their political campaign activity.  Failure to adhere to these restrictions could result in the loss of the organization’s tax-exempt status, the IRS also warns in its carrot and stick approach.

The Political Activity Rules

Code Sec. 501(c)(3) tax-exempt organizations are not allowed to participate or intervene in any political campaign on behalf of any candidate for public office.  They are, however, allowed to advocate for or against issues, ballot initiatives, and other legislative activities. 

The IRS advises that it is sending letters to national political party committees explaining these restrictions.  The IRS also published an open letter in the Federal Election Commission’s monthly newsletter asking candidates to make sure that their contacts with tax-exempt organizations are not considered a violation of the law.  Meanwhile, the agency also posted an open letter to its Exempt Organizations employees on the IRS website (www.irs.gov) explaining its goals and emphasizing enforcement of the rules. 

Ensuring Compliance

To maintain its tax-exempt status, a tax-exempt organization must not endorse a candidate, distribute statements for or against candidates, raise funds for or donate to candidates, or become involved in any activity that could support or oppose any particular candidate.  Any contact that an organization may have with a candidate for public office should be examined for these possibilities. 

Cite:  IR-2008-61, Updated FAQs on www.irs.gov;