|Cont||8/13/2010||HAYWARD, ASHTON-332||City of Pensacola Mayor||Divine Word Radio|
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In order to maintain tax-exempt status, 501(c)(3) nonprofit organizations cannot engage in political campaigning. Nonprofits with 501(c)(3) tax exempt status should be ever vigilant about this prohibition -- a violation could result in severe consequences.
The federal tax law is very strict on the issue of political campaigning: A 501(c)(3) organization is absolutely forbidden to directly or indirectly participate in any political campaign on behalf of (or in opposition to) any candidate for elective public office. Violation of this prohibition could lead the IRS to completely revoke your organization's tax-exempt status or impose excise taxes on your organization.
In other words, the IRS is serious about this issue, and your board of directors and officers should be equally serious in making sure that your organization complies with federal law in this area.
What Does "Participating in a Political Campaign" Mean?Organizations with 501(c)(3) status cannot participate in political campaigns.
What is a political campaign? In general, the IRS rule refers to campaigns between people who are running for offices in public elections. These can include: candidates running for president of the U.S.; candidates running for governor; candidates running for mayor; and also candidates for lower elected offices such as school board officials, city supervisors, and county trustees.
What is "participating?" Your organization cannot participate in a campaign, directly or indirectly, on behalf of or in opposition to a candidate. If your organization takes a stand in any campaign, supporting or opposing one or another candidate, this violates the prohibition.
The IRS RuleThe IRS uses what is called a "facts and circumstances" test to help it determine whether an organization has violated the prohibition on political campaigning. This means that the IRS will evaluate any potential misconduct within the context of the organization's other activities and the current political climate. So, an activity might be considered political campaigning two weeks before an election, but not two years before an election.
Some activities that the IRS has found to violate the prohibition on political campaigning include:
- inviting a political candidate to make a campaign speech at an event hosted by the organization
- using the organization's funds to publish materials that support (or oppose) a candidate
- donating money from the organization to a political candidate
- any statements by the organization's executive director, in his or her official capacity, that support a candidate
- criticizing or supporting a candidate on the organization's website
- inviting one candidate to speak at a well-publicized and well-attended event, and inviting the other candidate to speak at a lesser function
- inviting all candidates to speak at an event, but arranging the speaking event or choosing the questions in such a way that it is obvious that the organization favors one candidate over the others
- conducting a "get out the vote" telephone drive in a partisan manner by selecting caller responses for further follow-up based on candidate preference, and
- using the organization's website to link to only one candidate's profile.