helpful guidance in an election year

Section 501(c)(3) of the tax code exempts from federal income taxes a church or religious organization organized and operated exclusively for exempt purposes, and “no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office.”

Note that there are two limitations. First, churches may not engage in substantial efforts to influence legislation. Second, churches may not participate or intervene in any political campaign, even to an insubstantial degree, on behalf of or in opposition to any candidate for public office. Violation of the second limitation (often called the "campaign" limitation) may result in revocation of exempt status and the imposition of excise taxes. The IRS tax guide for churches explains this important limitation as follows:

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. Contributions to political campaign funds or public statements of position (verbal or written) made by or 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. Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.

Certain activities or expenditures may not be prohibited depending on the facts and circumstances. For example, certain voter education activities (including the presentation of public forums and the publication of voter education guides) conducted in a non-partisan 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 constitute prohibited political campaign activity if conducted in a non-partisan manner. On the other hand, voter education or registration activities with evidence of bias that (a) would favor one candidate over another, or (b) oppose a candidate in some manner, or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention.

The IRS, and the courts, have rarely applied this limitation to churches, despite numerous flagrant violations every election year, and so there is very little official guidance on what the limitation means. Nevertheless, since a violation of this limitation could jeopardize a church's tax-exempt status, it is important for church leaders to be familiar with what little guidance that does exist. The following table summarizes all of the official IRS and court interpretations.

POLITICAL CAMPAIGN ACTIVITIES BY CHURCHES an analysis of selected activities
Campaign activity	Impact on tax-exempt status	Basis
contributions to political campaign funds	prohibited	IRS Tax Guide for Churches
public statements of position (verbal and written) in favor of or in opposition to candidates for office-in official church publications and at official church functions	prohibited	IRS Tax Guide for Churches
providing a forum for all candidates to address the church	permitted	IRS Tax Guide for Churches
public comments made by ministers and other church employees in connection with political campaigns, not made at church facilities or in church publications and accompanied by statement that the comments are strictly personal and are not intended to represent the church	permitted	IRS Tax Guide for Churches; Jimmy Swaggart settlement with IRS
a church invites all candidates for a political office to address the congregation, and informs the congregation before each candidate's speech that the views expressed are those of the candidate and not the church and that the church does not endorse any candidate	permitted	Revenue Ruling 74-574; IRS Tax Guide for Churches
The church provides an opportunity for a candidate to speak in a non-candidate capacity (for example, as a member of the church, public figure, or expert in a non-political field), without providing equal access to all political candidates for the same office. The church ensures that the candidate speaks in a non-candidate capacity; no reference is made to the person's candidacy; the church mentions the capacity in which the candidate is appearing (without mentioning the person's political candidacy); and no campaign activity occurs.	permitted	IRS Tax Guide for Churches
a church distributes a compilation of voting records of all members of Congress on major legislative issues involving a wide range of subjects; the publication contains no editorial opinion and its contents and structure do not imply approval or disapproval of any members or their voting records	permitted	Revenue Ruling 78-248
a church distributes a voters guide containing questions demonstrating a bias on certain issues	prohibited	Revenue Ruling 78-248
the endorsement of candidates	prohibited	Internal Revenue News Release IR 96 23
campaign activities by employees within the context of their employment	prohibited	FSA 1993-0921-1
a church fails to "disavow" the campaign activities of persons under "apparent authorization" from the church, by repudiating those acts "in a timely manner equal to the original actions" and taking steps "to ensure that such unauthorized actions do not recur"	prohibited	FSA 1993-0921-1
engaging in fund raising on behalf of a candidate	prohibited	Internal Revenue News Release IR 96 23
neutral voter registration drives	permitted	11 C.F.R. § 111.4(c)(4)
newspaper ads urging voters to vote for or against a candidate	prohibited	Branch Ministries, Inc. v. Commissioner, 99-1 USTC 50,410 (D.D.C. 1999), aff'd, Branch Ministries v. Rossotti, 2000 USTC 50,459 (D.C. Cir. 2000)