Church tax exemption and political activity


J

John Levine

For close to 20 yeasrs, my church has had an online mailing list for
the members, where they post all sorts of stuff, sort of the online
version of the coffee hour after church. At this time of year, they
post announcements of political events. Due to the demographics of
the church (Unitarian church in a college town), the announcements are
overwhelmingly about Democratic events. Some of the members are
fretting that allowing political announcements puts our tax exemption
at risk.

This seems totally implausible to me becuase

a) the traffic on the list is clearly from individuals, not the church
(there's a separate list for church announcements)

b) all political announcements are equally welcome (I run the list,
I know who posts what)

c) the IRS has shown negligible interest in the topic.

Does anyone know of actual cases where the IRS has challenged a
church's exempt status due to political speech? It is my impression
that in many churches, the clergy tells the congregation from the
pulpit who to vote for, and nobody cares.
 
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T

terrable

John Levine said:
Does anyone know of actual cases where the IRS has challenged a
church's exempt status due to political speech? It is my impression
that in many churches, the clergy tells the congregation from the
pulpit who to vote for, and nobody cares.
Yes, the IRS has taken churches to court.

Here is what the IRS says:

http://www.irs.gov/uac/Charities,-Churches-and-Politics

and has a link to the BRANCH MINISTRIES, INC case.
 
A

Adam H. Kerman

John Levine said:
For close to 20 yeasrs, my church has had an online mailing list for
the members, where they post all sorts of stuff, sort of the online
version of the coffee hour after church. At this time of year, they
post announcements of political events. Due to the demographics of
the church (Unitarian church in a college town), the announcements are
overwhelmingly about Democratic events. Some of the members are
fretting that allowing political announcements puts our tax exemption
at risk.
This seems totally implausible to me becuase
a) the traffic on the list is clearly from individuals, not the church
(there's a separate list for church announcements)
b) all political announcements are equally welcome (I run the list,
I know who posts what)
c) the IRS has shown negligible interest in the topic.
Does anyone know of actual cases where the IRS has challenged a
church's exempt status due to political speech? It is my impression
that in many churches, the clergy tells the congregation from the
pulpit who to vote for, and nobody cares.
Unless determination is sought voluntarily, churches do not seek
recognition from IRS that they are described in 501(c)(3). For
constitutional reasons, the US Tax Code doesn't describe churches. Churches
describe themselves as churches instead. Instead, IRS may inquire into the
tax status of a church if facts and circumstances lead the government to
believe that the church may not qualify for exemption. IRS must receive
approval for an inquiry or examination from a specific high-level official
at Treasury. See Publication 1828 for minor details.

That being said, tax law prohibiting the participation or intervention in
any political campaign by an organization described in 501(c)(3) also
applies to churches.

As it happens, yes, IRS does state a position and gives examples in a
revenue ruling, Rev.Rul. 2007-41, published in IRB 2007-25.
http://www.irs.gov/irb/2007-25_IRB/ar09.html

See the section on Web pages, which is sort of applicable to your mailing
list.

The Internet has become a widely used communications tool. Section
501(c)(3) organizations use their own web sites to disseminate
statements and information. They also routinely link their web
sites to web sites maintained by other organizations as a way of
providing additional information that the organizations believe
is useful or relevant to the public.

A web site is a form of communication. If an organization posts
something on its web site that favors or opposes a candidate for
public office, the organization will be treated the same as if
it distributed printed material, oral statements or broadcasts
that favored or opposed a candidate.

An organization has control over whether it establishes a link to
another site. When an organization establishes a link to another
web site, the organization is responsible for the consequences of
establishing and maintaining that link, even if the organization
does not have control over the content of the linked site. Because
the linked content may change over time, an organization may
reduce the risk of political campaign intervention by monitoring
the linked content and adjusting the links accordingly.

Links to candidate-related material, by themselves, do not
necessarily constitute political campaign intervention. All the
facts and circumstances must be taken into account when assessing
whether a link produces that result. The facts and circumstances
to be considered include, but are not limited to, the context for
the link on the organization's web site, whether all candidates
are represented, any exempt purpose served by offering the link,
and the directness of the links between the organization's web
site and the web page that contains material favoring or opposing
a candidate for public office.

So don't post political announcements on the church's mailing list.

The solution couldn't be any simpler: Declare yourself the list owner
and that this is not a mailing list of your Unitarian Church.
I'm guessing that all the resources are yours, the mailing list server
and connectivity. Do not take a charitable deduction for providing these
resources, which I assume are negligible anyway.

Then, your list's subscribers are exercising freedom to publish and the
church isn't running afoul of tax code violations.
 
M

Mark Bole

This seems totally implausible to me
[...]
It is my impression
that in many churches, the clergy tells the congregation from the
pulpit who to vote for, and nobody cares.
I'm glad you took the time to post here, as it sounds like you had
already reached your own conclusion. Fortunately your fellow
worshippers were asking good questions.

I'm curious where you got your impression above, having attended your
own church for 20+ years. While not a regular church-goer, I read and
watch a variety of media sources, and have not seen anything that backs
up your impression.

I only bring this up because you are basically saying there is
wide-spread disregard for the tax code in the religious community and
"nobody cares". (Your own fellow worshippers apparently do care).
 
J

John Levine

I only bring this up because you are basically saying there is
wide-spread disregard for the tax code in the religious community and
"nobody cares". (Your own fellow worshippers apparently do care).
Try a Google search for phrases like "minister endorses Romney" and
you'll find plenty of stories about political endorsements from the
pulpit. The only case I've been able to find where the IRS took
action was an egregious one where the church bought billboards
attacking a candidate. I've been running my church's lists for
close to 20 years, and only now has someone asked about the tax
angle, so that doesn't strike me as a lot of interest.

The suggestion that I simply state that they're my lists rather than
the church's seems like a good one. The person correctly guessed that
I run them on my equipment at my own expense, with no payment explicit
or implicit from the church.
 
J

Jonathan Kamens

I don't _at all_ agree that the IRS language about web sites
and links is comparable to the situation described by the OP.

As the OP said, individual members of the church are postings
the political messages, not the church. That's entirely
different from the web site _choosing_ what to put on its web
site and _curating_ that content.

As the OP said, a "coffee hour after church" is a very good
analogy for what the mailing list is, and a church would never
lose its tax-exempt status because members stood around
talking politics during coffee hour.

Even if the church provides the mailing list, the logic that
this somehow implies endorsement of the speech is nonsense.
The church also provides the room in which coffee hour occurs
and probably the coffee as well, and yet that does not imply
endorsement of political speech made by church members during
coffee hour.

A far more on-point legal reference is the CDA's Section 230,
which exempts web sites from liability for content posted by
third parties on their site, as long as that content is not
curated by the operator of the web site (and sometimes even
when it is, if the curation is sufficiently limited in
scope). As long as the church isn't controlling what speech
is posted to the list, it bears no responsibility for the
content and does not endorse it, and therefore I don't think
it'd lose its tax-exempt status over it.

There may in fact be IRS regulations which make this
problematic, but the ones quoted above aren't them.
 
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D

D.F. Manno

A far more on-point legal reference is the CDA's Section 230,
which exempts web sites from liability for content posted by
third parties on their site, as long as that content is not
curated by the operator of the web site (and sometimes even
when it is, if the curation is sufficiently limited in
scope).
Care to quote exactly which part of 47 USC 230 you think applies?
Because I don't think you can. The statute immunizes against civil
liability; IRS revocation of a tax exemption hardly qualifies.
 
S

Stuart A. Bronstein

D.F. Manno said:
Care to quote exactly which part of 47 USC 230 you think applies?
Because I don't think you can. The statute immunizes against civil
liability; IRS revocation of a tax exemption hardly qualifies.
Paragraph (c) of that statute says,

"No provider or user of an interactive computer service shall be
treated as the publisher or speaker of any information provided by
another information content provider."

Later on in the statute, specifically paragraph (e), it says that
the provisions of that statute won't have any effect on criminal,
intellectual property or communication privacy laws. It could have
but doesn't say that it won't have any effect on tax laws.

Under normal rules of statutory construction, that would mean the
statute would, under proper circumstances, have an effect on tax
laws. Of course, I haven't looked to see if there are any cases on
this issue, but that's the way it appears to me.
 
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A

Adam H. Kerman

Jonathan Kamens said:
I don't _at all_ agree that the IRS language about web sites
and links is comparable to the situation described by the OP.
As the OP said, individual members of the church are postings
the political messages, not the church. That's entirely
different from the web site _choosing_ what to put on its web
site and _curating_ that content.
Jonathan, you didn't quote anything I wrote. If you had, the reader
could see for himself that at no point did I state that the language was
"comparable". Instead, I stated about Rev.Rul. 2007-41,

See the section on Web pages, which is sort of applicable to your
mailing list.

I wrote "sort of applicable", an equivocation, because it wasn't exactly
comparable, merely the only guidance I found on Internet communication.

In any event, there was no church tax issue in the first place because
the OP, and not the church, provided computer resources and connectivity
for the mailing list. I advised him to declare himself the mailing list
owner, and not the church, as a concern had been expressed, and not to
take a charitable deduction for the resources he provided. The OP accepted
my advice as a reasonable solution.
As the OP said, a "coffee hour after church" is a very good
analogy for what the mailing list is, and a church would never
lose its tax-exempt status because members stood around
talking politics during coffee hour.
Please don't say "never". All politicking is people talking. The person
talking politics could be the president of the congregation, and he could
be recruiting volunteers or campaign donations on behalf of a political
candidate, and that could easily be an issue in an inquiry or examination
into the church's tax status. Any issue raised costs the church time and
money to defend against.

If a church organized a phone bank to canvass for like-minded registered
voters to vote for a particular candidate and to offer rides to the
polling place, the politicking would be by congregants and not the church
leadership. This is an example of prohibited campaign intervention,
even though it's just people talking politics, because church resources
were used to organize that phone bank.
Even if the church provides the mailing list, the logic that
this somehow implies endorsement of the speech is nonsense.
The church also provides the room in which coffee hour occurs
and probably the coffee as well, and yet that does not imply
endorsement of political speech made by church members during
coffee hour.
Some speech leads to action, like volunteer recruitment and contributions.
The political prohibition is a bit broader than endorsement, but activities
that favor or oppose a candidate or groups of candidates could constitution
prohibited participation or intervention. Non-partisan voter registration
or voter education activities aren't prohibited. I've never heard of such
a thing (perhaps Unitarians would allow this), but allowing partisans
for opposing candidates to use church resources to recruit volunteers
and solicit funds could be prohibited.

Given that the mailing list isn't used for church business, there's no
reason for the church to provide a mailing list for political speech
among its congregants. As there are better alternatives available,
such as a congregant setting up the mailing list himself, perfectly
constitutional political speech among church congregants hasn't been stifled.

In the Revenue Ruling in question, IRS guidance gives a hypothetical
of speech prohibited to the leaders of a 501(c)(3) of a university
president endorsing a candidate in an alumni newsletter. The newsletter
is an official publication of the university, so it's prohibited campaign
intervention, even if the university president were to pay a pro-rated
share of the distribution cost applicable to the portion devoted to
the endorsement.

Sure. It's different when congregants who aren't leaders of the church talk
politics. No, IRS didn't offer guidance, but if there's any possibility
that IRS could raise the issue of a church mailing list with political
discussion is an official church publication, why not avoid having to
deal with the issue by encouraging a congregant to provide the mailing list
instead?

A church wins nothing in a confrontation with IRS on this issue. There's
no benefit to the church, as opposed to a congregant, offering this
mailing list, and it can only lose by having to defend the issue, even if
IRS ultimately drops it.
A far more on-point legal reference is the CDA's Section 230,
which exempts web sites from liability for content posted by
third parties on their site, as long as that content is not
curated by the operator of the web site (and sometimes even
when it is, if the curation is sufficiently limited in
scope). As long as the church isn't controlling what speech
is posted to the list, it bears no responsibility for the
content and does not endorse it, and therefore I don't think
it'd lose its tax-exempt status over it.
You're comparing liability for obscenity to prohibited political activity
by churches? The church tax issue is providing resources for activities
prohibited to churches. What are you going to argue, common carrier law
protects churches from losing tax status?
There may in fact be IRS regulations which make this
problematic, but the ones quoted above aren't them.
Well, there may not be any others. I think if IRS wished to offer additional
guidance on political activities prohibited to 501(c)(3)s including churches,
it would write a revenue ruling to replace this one.
 

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