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Tax Alert: Reminder about Political Activities of Nonprofits

March 18, 2016

The 2016 election season is red hot. So, now is the perfect time for a reminder about the political activity prohibitions applicable to public charities and private foundations.

The Internal Revenue Code has unique restrictions that apply to 501(c)(3) organizations. In 2007, the IRS published Revenue Ruling 2007-41. It begins:

Organizations that are exempt from income tax under section 501(a) of the Internal Revenue Code as organizations described in section 501(c)(3) may not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

The ruling also provides 21 different factual situations illustrating what charities can and cannot do.  The situations cover common activities such as:

  • Voter Education, Voter Registration and Get Out the Vote Drives
  • Individual Activity by Organization Leaders
  • Candidate Appearances
  • Issue Advocacy vs. Political Campaign Intervention
  • Business Activity
  • Web Sites

Read Rev. Rul. 2007–41.

Sue Odom is Member (Partner) of Nexsen Pruet's Tax Group in Columbia. She regularly advises orginazations about matters related to tax-exempt status. Her clients include public charities and private foundations described in Section 501(c)(3), social welfare organizations under Section 501(c)(4), Section 501(c)(6) trade associations and Section 501(c)(12) electric cooperatives.