Sunday, April 29, 2012
In a final determination letter released earlier this month (201214035), the IRS ruled that a nonprofit organization did not qualify as a section 501(c)(4) social welfare organization because 80% of the organization's time would be spent supporting the political interests of a candidate in a foreign country. The letter is noteworthy because while it has long been thought that "intervention in political campaigns on behalf of or in opposition to any candidate for public office" (Reg. § 1.501(c)(4)-1(a)(ii)) extended to candidates for foreign public offices, to the best of my knowledge this is the first IRS ruling that expressly takes this position. Since the definition of political campaign intervention is generally the same under both section 501(c)(3) and section 501(c)(4), this (nonprecedential) letter indicates that the 501(c)(3) prohibition on such intervention also extends to candidates for foreign public offices.