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Thursday, August 15, 2013

Commission Proposes Elimination of Ban on Politicking by Churches

CommissionThe Commission on Accountability and Policy for Religious Organizations yesterday released a 60-page report offering Congress and the Treasury Department new proposals for bringing clarity to current IRS restrictions on political expression by nonprofit organizations:

After issuing a report to Sen. Charles Grassley (R-Iowa) on national tax policy for religious and other nonprofit organizations in December, the Commission on Accountability and Policy for Religious Organizations ("Commission") turned its attention to a Grassley request to address the prohibition against political campaign participation for nonprofits exempt under Section 501(c)(3) of the Internal Revenue Code.

The Commission strongly concluded three things:

  • Members of the clergy should be able to say whatever they believe is appropriate in the context of their religious services or their other regular religious activities without fear of IRS reprisal—even when such communication includes content related to political candidates. Such communications would be permissible provided that the organization does not expend incremental funds in making them. In other words, as long as the organization’s costs would be the same with or without a political communication, the communication would be permissible.
  • Secular 501(c)(3) organizations should have comparable latitude when engaging in their regular, exempt-purpose activities and communications.
  • Current IRS policy of not permitting tax-deductible funds to be disbursed for political purposes should be preserved—even though many have suggested repeal.

In January 2011, Sen. Grassley asked the Evangelical Council for Financial Accountability (ECFA) to coordinate a national effort to provide input on accountability, tax policy, and electioneering and political expression for nonprofit organizations in general, and religious groups in particular. ECFA then created the Commission (, including panels of legal experts, religious sector representatives and nonprofit sector representatives.

In the new report to Sen. Grassley, Commission Chairman Michael E. Batts writes, "It is both disturbing and chilling that the federal government regulates the speech of religious organizations….The prohibition against participation or intervention in a political campaign included in Section 501(c)(3) of the Internal Revenue Code…is the only law of its type on the books…the only law that allows the IRS to evaluate the content of a sermon delivered by a member of the clergy…the only law that could cause a church to lose its federal tax exemption based on the words spoken by its leaders in a worship service."

The Commission maintains the electioneering prohibition for nonprofit organizations, as currently applied and administered, "lacks clarity, integrity, respect and consistencyand that something needs to change." Current application of the law, the Commission believes, is untenable for several reasons:

  • Guidelines are often vague, causing uncertainty as to what is permissible—and as a result, religious and nonprofit leaders often avoid speaking out on issues in permissible ways, due to fear of government reprisal. The vagueness of current guidelines also makes it difficult for the IRS to administer the law.
  • IRS enforcement actions have been inconsistent or selective—there are ample cases of prohibited political activity being ignored by the IRS.
  • For some faith communities, engagement in political communications is inextricably steeped in their history and culture. For example, a 2012 Pew Research Center study reveals black Protestant churchgoers are eight times as likely to hear about political candidates at church as their white mainline counterparts.

The Commission is comprised of 14 members and 66 panel members representing every major faith group in America, prominent attorneys with expertise in exempt organization and constitutional law, and other prominent leaders from across the U.S. nonprofit sector.

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Brian Leiter strongly criticizes the argument for special treatment of churches and other religious organizations in his book Why Tolerate Religion? The idea that these groups have a "right" to express themselves with the public's money is especially offensive. This is not about religion, it's about politics . . . as usual.

Posted by: michael livingston | Aug 15, 2013 12:43:34 PM

"It is both disturbing and chilling that the federal government regulates the speech of religious organizations

They are not regulating the speech of religious organizations.

It is all about being a 501(c)(3) organization. Which are not just religious organizations.

If a church wants to go on about which candidates to vote for, then the can chose some other 501(c) to be if they wish to remain tax free.

Yeah, now the flock can't deduct what they donate from their taxes, but that's the way it works. Which most likely cut the amount that the church raises. Too bad. I have no sympathy for them.

If 501(c)(3)'s do get to shoot their mouth about elections and in particular candidates, ALL non-profits will change their filings to 501(c)(3), the people donating get to take the tax deduction. And the elections will get worse.

There already is too much money being spent on elections. Something like this only piles it deeper and higher.

Posted by: Bryan Price | Aug 15, 2013 4:41:04 PM

Really, this isn't about letting churches do politicking, it's about having de minimis exceptions. If a pastor endorses a candidate for President and spends 5 minutes in church explaining why, that's a tiny fraction of the inputs or outputs of the church as a nonprofit organization. It's reasonable that if there is an endorsement only 1 out of 52 Sundays, and then only 1 hour (5 minutes of service time, 55 of prep time) out of a pastor's 40 hour work week, that the organization shouldn't lose its tax-exempt status, even tho it's an intentional breach of the rules.
It wouldn't be hard to construct rules so that church politicking can't be more than a trivial part of its activities. That's certainly easier than the present need to keep track of how much of a nonprofit's activities are unrelated business (e.g., church daycare).

Posted by: Eric Rasmusen | Aug 16, 2013 7:41:17 AM