IRS releases new ruling on nonprofit election activites

The Internal Revenue Service on June 1 released binding guidance in Revenue Ruling 2007-41 for Section 501(c)(3) Organizations (click link to view) regarding 501(c)(3) election year activities.  The new ruling is similar to a February 2006 Fact Sheet released by the IRS, Election Year Activities and the Prohibition on Political Campaign Intervention for Section 501(c)(3) Organizations. There are some differences, however. 

The Revenue Ruling includes an analysis of 21 situations, indicating in each case what is permissible and what is not, such as voter guides, public forums, voter education, get-out-the vote drives, individual activities by organization leaders, candidate appearances and forums, issue advocacy and business activities. 

The IRS also released on June 1 its Report on the Political Activity Compliance Initiative for the 2006 election cycle, which include updates from 2004 investigations of political activities by 501(c)(3) nonprofits.  According to the report, The IRS investigated 40 cases in 2006 – 14 involving churches and 26 involving other nonprofits – and in 26 cases, 65 percent, prohibited political interventions were substantiated and written advisories were issued. The chart below details the types of allegations of improper activity investigated:

Allegations	2004 Totals	2006 Totals
1. Exempt organization distributed printed documents supporting candidates.	24	14
2. Church official made a statement during normal services endorsing candidates.	19	13
3. Candidate spoke at an official EO function.	11	16
4. Organization distributed improper voter guides or candidate ratings.	14	7
5. Organization posted a sign on its property endorsing a candidate.	12	15
6. Organization endorsed candidates on its website or through links on its website.	15	11
7. Organization official verbally endorsed a candidate.	8	5
8. Organization made a political contribution to a candidate.	7	11
9. Organization allowed a non- candidate to endorse a candidate during a speech at the organization’s function.	4	2
10. Organization’s facilities used for political campaign intervention.		6