What church leaders should know in an election year
Article summary. In order to maintain their exemption from federal income taxes, churches and other religious organizations must comply with several requirements specified in section 501(c)(3) of the tax code. One of these requirements is that the organization not participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office. Many churches have violated this requirement in the past with no adverse consequences. However, the landscape is changing. The IRS suggests that this election year will not be "business as usual." It released a report earlier this year summarizing the results of an examination of the political activities of several charities, including churches. The report concludes that prohibited campaign intervention by churches and charities is increasing, and as a result the IRS is 'stepping up its efforts' to enforce the ban. Such developments make it essential for church leaders to be familiar with the consequences of political involvement. This article explains the campaign limitation in detail, drawing upon all relevant IRS rulings and court decisions. It also evaluates the application of the limitation to several common church practices.
'Although charities are precluded from intervening in political campaigns, the IRS has seen a growth in the number and variety of allegations of such behavior by section 501(c)(3) organizations during election cycles. The increase in allegations, coupled with the dramatic increases in money spent during political campaigns, has raised concerns about whether prohibited funding and activity are emerging in section 501(c)(3) organizations. If left unaddressed, the potential for charities, including churches, being used as arms of political campaigns and parties will erode the public's confidence in these institutions.' (excerpt from a 2006 IRS 'executive summary' of its final report on the Political Activities Compliance Initiative)