Nonprofit Law Prof Blog

Pulpit Freedom Sunday to Again Challenge Political Campaign Prohibition

Over 1,300 religious leaders are prepared to deliberately violate the section 501(c)(3) prohibition on political campaign activity this Sunday, October 7, 2012, by endorsing or opposing a political candidate for public office from their pulpits.  Sponsored by the Alliance Defending Freedom, the purpose of Pulpit Freedom Sunday is to openly exercise their claimed First Amendment freedom of religious expression, which participants claim is violated by the "1954 Johnson Amendment" to section 501(c)(3).  Since its origination in 2008, the Alliance has sought a test case that can be brought to the U.S. Supreme Court, with the desired result of the Johnson Amendment being declared unconsitutional as to churches.

However, the IRS is presently unable to adequately respond to participant churches hoping for the commencement of a legal battle over the statutory prohibition.  As reported by the Daily Tax Report, the proposed regulations to the church tax inquiry rules under section 7611 have not yet been finalized to name the IRS official responsible to carry out the statutorily prescribed inquiry rules.  The current proposed regulations would name the IRS Director of Exempt Organizations, a position currently held by Lois Lerner.

For additional perspectives and opinions on Pulpit Freedom Sunday, see the following:

Steve Siebold, "Pulpit Freedom Sunday - Should the Church be Tax-Exempt?"  (Huffington Post's The Blog)

Meredith Bennett-Smith, "Pastors to Challenge IRS Ban on Political Speech with 'Pulpit Freedom Sunday'"  (Huffington Post, containing Fox News video)

NAM

 

Deductibility of Donations in the Political Season

In the Weekend Wall Street Journal Tax Report, an article entitled, Is Your Political Donation Deductible?, provides a good overview of the various entities involved in the political arena and the deductibility of donations to those entities.  The article opens as follows:

It is the height of election season, and campaign spending is setting new records. As in previous cycles, most of the giving has come from individuals.

For those people, tax questions abound. Which donations to political causes and campaigns are tax deductible? Which ones will be disclosed on the Internet — or reported to the IRS — and which will remain secret? Which could trigger a 35% gift tax?

A crazy quilt of federal tax and election laws makes simple answers elusive. "At best the rules are opaque, and at worst they're misleading," says Ellen Aprill, a professor at Loyola Law School in Los Angeles who studies the area. The best approach, say experts, is to know the rudiments of this tricky area in order to identify the most effective donation strategies and avoid a few traps. ...

The bottom line: There are many ways to give politically to candidates and causes, depending on how much you value deductibility, disclosure or avoiding potential tangles with the IRS. Here are more details about common types of political contributions.

 

The article proceeds to discuss donations to:  (i) political campaigns, parties and certain PACs; (ii) super PACs; (iii) social-welfare nonprofits; (iv) other nonprofits such as trade associations; and (v) nonprofit public charities.

(Hat tip:  TaxProf Blog)

NAM

IRS Announces Hearing on Proposed 501(r) Rules

The Internal Revenue Service issued a notice of public hearing on October 1, 2012 pertaining to proposed regulations under IRC §501(r) that provide guidance regarding the requirements for charitable hospital organizations "relating to financial assistance and emergency medical care policies, charges for certain care provided to individuals eligible for financial assistance, and billing and collections."   The hearing will take place on October 29, 2012 in Washington, DC.

NAM

Stats on Reinstatement of Automatically-Revoked Tax-Exempts

Sandy Deja, a former IRS Exempt Organizations Specialist and author of books and websites on obtaining tax-exempt status, has posted a report, including charts and graphs, on organizations whose tax-exempt status was automatically revoked and then reinstated.  The report is available at:  http://501cfreebook.com/The_Comeback_Kids.php.

NAM