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Q&A: Will Our Tax-Exempt Status Be Jeopardized if We Encourage a Senate Confirmation of a Federal Judge?

Will a church jeopardize its tax-exempt status by encouraging Senate confirmation of federal judicial candidates?

Possibly, concluded the IRS chief counsel's office in a General Counsel Memorandum (GCM). Churches jeopardize their tax-exempt status under section 501(c)(3) of the Internal Revenue Code by either (1) engaging in substantial efforts to influence legislation, or (2) intervening or participating in a political campaign on behalf of or in opposition to any candidate for public office. But do efforts to encourage Senate confirmation of federal judicial candidates fall under either of these restrictions? The IRS concluded that such efforts cannot be characterized as intervention or participation in a political campaign on behalf of or in opposition to a candidate for public office, since the income tax regulations define a "candidate for public office" as a contestant for elective public office. Federal judges, by comparison, are not elected but rather are appointed for life by the President with the consent of the Senate. However, the IRS concluded that efforts to encourage Senate confirmation of federal judicial candidates did constitute an attempt to influence legislation, since Senate confirmation of judicial candidates constituted "legislation" for purposes of section 501(c)(3) of the Code. The IRS reasoned that Senate confirmation is a "final action by Congress," much like any other legislation that is enacted. Accordingly, efforts to encourage the Senate to confirm judicial candidates constitute legislative activity, and jeopardize an organization's tax-exempt status if the efforts are substantial in nature. GCM 39694.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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Posted:
  • May 2, 1988

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