United States

Election year do’s and don'ts

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The 2016 general election is fast approaching. While the field is still wide, some tax-exempt organizations will begin to ramp up their activities as the election date looms on the horizon.

Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds and public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.

However, certain activities or expenditures may not be prohibited, depending on the facts and circumstances. For example, certain voter education activities (including presenting public forums and publishing voter education guides) conducted in a nonpartisan manner do not constitute prohibited political campaign activity. In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not be prohibited political campaign activity if conducted in a nonpartisan manner.

On the other hand, voter education or registration activities with evidence of bias that:

  • Would favor one candidate over another
  • Oppose a candidate in some manner
  • Have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention

For sections 501(c)(4), (5) and (6) organizations, certain political campaign activities may result in an excise tax being assessed against these organizations.

Our white paper analyzes and discusses activities that will result in a section 501(c)(3) organization being accused of entering into political campaign activity and activities that will not result in such an accusation. It then looks at six factual situations where sections 501(c)(4), (5) or (6) organizations have entered into political activities and discusses and analyzes those situations where these types of organizations may be subject to an excise tax under section 527(f).

AUTHORS


Contact

Bob Billig
Partner
National Practice Leader
866.239.8790

EMAIL US


Capabilities

Muse Newsletter
A bi-monthly publication dedicated to providing ideas and education to tax exempt organizations.

RSM MarketPrism
Provides organizations with valuable benchmarking information on a real-time basis.


Events/Webcasts

IN-PERSON EVENT

RSM Colleges and Universities Symposium

  • December 14, 2016

RECORDED WEBCAST

Nonprofit webcast series: Modernizing the finance function

  • November 15, 2016

RECORDED WEBCAST

2016 annual tax update webcast for nonprofit organizations

  • October 27, 2016