IRS News Release IR-2006-36
The IRS has released a report on examinations of political activity by tax-exempt organizations during the 2004 election campaign. The report also provides guidance to charities during the 2006 election season regarding political activities.
The IRS began this review following an increase in complaints about political activities during the 2004 election cycle. To ensure fairness and impartiality, the issues examined stretched across the political spectrum. Further, IRS career civil servants handled the cases without regard to political affiliation.
Nearly three-quarters of 82 examinations concluded that the tax-exempt organizations, including churches, engaged in some level of prohibited political activity. Most of these exams concerned one-time, isolated occurrences of prohibited campaign activity, which the IRS addressed through written advisories to the organizations.
In three cases (involving tax-exempt organizations that were not churches) the prohibited activity was serious enough to warrant the IRS proposing the revocation of the organizations' tax-exempt status.
"The law does not allow charities to participate in political campaigns," said IRS Commissioner Mark Everson. "While the vast majority of charities, including churches, did not engage in politicking, our examinations substantiated a disturbing amount of political intervention in the 2004 electoral cycle. As the 2006 electoral season approaches, we are going to provide more and better guidance and move quickly to address prohibited activities."