IRS Releases Guidance on Political Campaign Activities of Exempt Organizations
Not-For-Profit Advisor, 2007 Summer

Organizations that are tax-exempt under Section 501(c)(3) are prohibited from participating or intervening in a political campaign. Such participation can result in the imposition of penalties as well as revocation of tax-exempt status. This has been an area of great focus by the IRS in recent years; during 2006, the IRS conducted a compliance initiative relative to political activities of exempt organizations and recently published a report on its findings. This report is available under the “Charities & Non-Profits” tab on the IRS’s website, www.irs.gov.

In addition, the IRS released Revenue Procedure 2007-41, which provides detailed information on its interpretation of the political activity prohibition by way of 21 examples. The examples cover such topics as voter education and registration activities, individual activity by exempt organization leaders, candidate appearances at exempt organization events, the distinction between issue advocacy and political campaign activities, exempt organization business activities, and use of websites to participate in political campaigns. This ruling is also included on the IRS’s website, and we encourage you to refer to this ruling if your organization engages in any activities that may be considered to be political in nature.