Lobbying and Political Activities of Public Charities: Pay Special Attention in an Election Year

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Under normal circumstances, charities must be careful how they deal with political issues, to ensure they do not engage in prohibited political activity. During an election year, they must be especially careful. Failure to monitor a charity's activities or those of its members may trigger IRS sanctions, which can range from imposition of excise taxes to revocation of the organization's tax-exempt status. The roles for political and lobbying activities by public charities vary, depending on the type, scope and amount of activity conducted.

LOBBYING

Lobbying activity includes attempts to influence legislation at any level of government; legislation does not, however, include actions .by executive, judicial or administrative bodies. An organization attempts to influence legislation by contacting, or urging the public to contact, members or employees of a legislative body for the purposes of proposing, supporting or opposing legislation, or by advocating the adoption or rejection of legislation.

Public charities may engage in lobbying as long as it does not constitute a "substantial part" of their total activities; the IRS will consider both the quantity and the quality of a charity's actions. Certain exempt organizations (other than churches and private foundations) may elect to apply an expenditures test; a charity will not jeopardize its exempt status as long as its lobbying expenditures do not exceed certain limits. Charities that go over these limits in any one year are subject to a 25% excise tax on the excess expenditures.

Some activities allowed. Exempt organizations may be involved in some activities that deal with public policy issues. These include conducting (on a nonpartisan basis) educational meetings or preparing and distributing educational materials.

POLITICAL ACTIVITY

Political activities by charitable organizations are absolutely prohibited. Exempt organizations may not directly or indirectly participate in any political campaign on behalf of, or in opposition to, any candidate for public office. …