Sunday, February 16, 2014
Should proposed definition of “candidate-related political activity” apply to 501(c)(3) public charities?
The Evangelical Council for Financial Accountability (ECFA) submitted comments to the U.S. Department of Treasury and to the IRS. Generally, the ECFA’s comments press for “more freedom and greater clarity in the rules governing political activity by tax-exempt organization.”
The comments are in response to the proposed guidance the Treasury and IRS gave last November. While the Treasury and IRS requested “comments from the public” the guidance given by the Treasury and the IRS was meant to help 501(c)(4) tax-exempt social welfare organizations “on political activities related to candidates that will not be considered to promote the social welfare.” The EFCA comments were based on recommendations from the Commission on Accountability and Policy for Religious Organizations.
President of ECFA Dan Busy offered the following four key comments on the proposed guidance:
1) "The Treasury and the IRS should proceed with great caution in applying the proposed 'candidate-related political activity' test to 501(c)(3) organizations."
2) "Replacing the 'facts and circumstances' approach with a clear-cut definition of political activity would benefit charities and the IRS."
3) "The proposed 'candidate-related political activity' test would silence charities from speaking out on issues with political significance."
4) "The Commission's recommendations strike a necessary balance of permitting charities to engage in communications that are relevant to their exempt purposes while ensuring that they expend funds in a manner consistent with their tax-exempt purposes."