IRS Revenue Ruling 2007-41
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. Despite the importance and potential impact of this limitation on religious organizations, it has not been defined with sufficient clarity. The IRS has attempted to provide more clarification in recent years. Most recently it published a ruling that addresses 21 questions. These questions, and the IRS responses, are summarized in this feature article.
The participation by churches and church leaders in political campaigns is an American tradition. Common examples include:
- Inviting candidates to speak during worship services
- Distributing "voter education" literature reflecting candidates' views on selected topics
- Voter registration activities
- Enlisting volunteers for a particular candidate's campaign
- Collecting contributions for a particular candidate
- Statements by ministers during worship services either supporting or opposing various candidates
Unfortunately, it is not well understood that these kinds of activities, as well-meaning as they may be, jeopardize a church's exemption from federal income taxes. This is because section 501(c)(3) of the tax code prohibits tax-exempt organizations (including churches) from any intervention or participation in political campaigns on behalf of or in opposition to any candidate for public office. To be sure, there have been massive violations of this prohibition during every presidential election year with not a word of protest from the IRS. But things are changing. In 1999 the IRS for the first time revoked the exempt status of a church for its involvement in a political campaign, and over the past few years the IRS has made a number of pronouncements indicating that church political activities no longer will be ignored.