22 November, 2024

How to Protect Your Church”s Tax Exempt Status at Election Time

by | 20 September, 2016 | 0 comments

By Mark A. Taylor

Sometimes it”s important to repeat what we think everyone already knows. This week we”re giving space to advice from a Christian lawyer in Maryland to remind us what churches and church spokespersons can and cannot say as our national election approaches.

Philip Chong, an attorney with the international law firm Duane Morris LLP, and treasurer and board member at the Baltimore Church of Christ, sent the following advice, which we”re pleased to post here. You may want to share this information with a Christian leader you know.

Just because everyone seems to be talking about the election these days does not mean churches and religious organizations should be talking about it too. Indeed, doing so could jeopardize a religious organization”s tax-exempt status and subject the organization to certain tax liabilities.

Election Campaign SpeechSection 501(c)(3) organizations, including churches and religious 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.” See Internal Revenue Service, Tax Guide for Churches & Religious Organizations (2015), https://www.irs.gov/pub/irs-pdf/p1828.pdf (“Tax Guide”). Whether a religious organization is violating this rule depends upon all of the facts and circumstances of each case.

Clearly, unless it wishes to forfeit its tax-exempt status, a religious organization may not contribute money to a political campaign or endorse (or oppose) any candidate for public office. Additionally, leaders of religious organizations””including its board of directors””must adhere to similar constraints. Leaders may not make partisan comments in official organization publications or at official functions of the organizations.

However, leaders may, in their individual capacities and outside of their organization”s functions and publications, share partisan comments. To avoid confusion, the IRS encourages religious leaders who share partisan comments “to clearly indicate that their comments are personal and not intended to represent the views of the organization.” See Tax Guide.

There are many gray areas when it comes to religious organizations and political campaigns. For example, while a religious organization may not intervene in a political campaign, it may be able to take a position on public policy issues without forfeiting its tax-exempt status. Furthermore, a religious organization may be able to invite a candidate to speak under certain conditions. However, the propriety of such actions will depend on the facts and circumstances of each case.

In short, as November approaches and the public rhetoric intensifies, religious organizations should take time to train their leadership on political participation issues. Leaders should be informed of the basic rules outlined above and legal counsel should be sought if a religious organization or its leaders plan to engage in any political related activities.

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