tax exempt politics

"Exemption Requirements

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.

Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.

The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.

Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct. For a detailed discussion, see Political and Lobbying Activities. For more information about lobbying activities by charities, see the article Lobbying Issues; for more information about political activities of charities, see the FY-2002 CPE topic Election Year Issues."

"Exemption Requirements - Political Organizations

A political organization subject to 527 is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. The exempt function of a political organization is influencing or attempting to influence the selection, nomination, election or appointment of an individual to a federal, state, or local public office or office in a political organization.

A political organization must be organized for the primary purpose of carrying on exempt function activities. A political organization does not need to be formally chartered or established as a corporation, trust, or association. A separate bank account in which political campaign funds are deposited and disbursed only for political campaign expenses can qualify as a political organization. When there are no formal organizational documents, consideration is given to statements of the members of the organization at the time of its formation that they intend to operate the organization primarily to carry on exempt function activities.

A political organization's primary activities must be exempt function activities. A political organization may engage in activities that are not exempt function activities, but these may not be its primary activities.

See the FY-2002 CPE article entitled Election Year Issues for further information regarding tax issues for political organizations. See Filing Requirements for more details."

Because they are exempted under different sections of teh tax code.

So why is it that whenever a church endorses a Republican candidate it puts its tax exempt status at risk?

Churches are tax exempt organizations.

Political parties, political action committees and political campaign committees are all tax exempt organizations.

So why is it that whenever a church endorses a Republican candidate it puts its tax exempt status at risk?

That's interesting, fishin'. Yet, political contributions made by business are not taxable expenses, while those to 501(c)(3) are. Any thoughts on that?

fishin wrote:

Because they are exempted under different sections of the tax code.

What difference does the section of the tax code make?

If you buy a 4 pound Tyson frying chicken from Wal-Mart and a 4 pound Tyson frying chicken from Sam's Club, have you not bought the same thing? Why should one be taxed and the other not?

That's interesting, fishin'. Yet, political contributions made by business are not taxable expenses, while those to 501(c)(3) are. Any thoughts on that?

flaja wrote:

So why is it that whenever a church endorses a Republican candidate it puts its tax exempt status at risk?

They are given that exemption with the agreement that church and state shall remain separate. Government will not tell you what god to worship and a church will not tell you who to vote for. If Unitarian ministers started preaching for Obama, they would face the criticism as those preachers on The Trinity Broadcasting Network.

flaja wrote:

Churches are tax exempt organizations.

Political parties, political action committees and political campaign committees are all tax exempt organizations.

So why is it that whenever a church endorses a Republican candidate it puts its tax exempt status at risk?

A church who endorses a Republican candidate should be more concerned about the eternal destiny of the souls of its members than its tax exempt status.

The money you buy that chicken with is taxed by the IRS whether you spend it at Sam's oe Walmart (or any other store...). You got it as income, you pay income taxes on it.

The sigificance is that donations to a 501(c)(3) org can be deducted by the contributor on their income taxes. Not so for a donor to a 527 org.

So the Church can't be a non-profit under both sections of the tax code on it's own. It has to chose one or the other. If they want to be a political org. then there is nothing that prohibits them from giving up their 501(c)(3) status and becoming a 527.

So why should the money that a political organization receives in income be exempt from the income tax when a church, whose income is also exempt, cannot engage in politics? Why have separate categories for organizations that do the same thing?

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The sigificance is that donations to a 501(c)(3) org can be deducted by the contributor on their income taxes. Not so for a donor to a 527 org.

So every political organization is a 527?

Don't educational organizations, that can educate people on what candidate to support and not support, fall in the 501(c)(3) category?

If I opened a non-profit private school wouldn't it be 501(c)(3) and wouldn't I be able to instruct my students on the evils of liberalism without jeopardizing my tax exempt status?

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So the Church can't be a non-profit under both sections of the tax code on it's own. It has to chose one or the other. If they want to be a political org. then there is nothing that prohibits them from giving up their 501(c)(3) status and becoming a 527.

At least in Florida a church's property is exempt from state and local property taxes because it has 501 tax-exempt status from the IRS. But if a "church" organizes under 527, would it then have to pay property taxes? Around here some churches have so much property that they'd pay more in property taxes than they ever would in income taxes.

PACs and Churches don't do the same thing.

Well.... That is what section 527 of the tax code specifically defines. There may be political groups that aren't 527s but they don't get the tax-free status that a 527 would get and they'd have to play by whatever rules are setup for whatever section of the tax code they'd fall under.

Ummm.. No. Educational institutions can fall under 501(C)(3) but those that do can not participate in partisan politics.

I'd guess that you might get away with it for a while but eventually someone would complain to the IRS and you've get investigated. They'd make a determination based on the rules that they've published. If you violated them you'd no longer be a 501(c)(3).

That would be up to Florida now wouldn't it? There is no Federal mandate that cities or states provide any group with property tax exemptions. Each state is free to set it's own laws in that regard and I have no idea how Florida handles property taxes with 527s.

fishin wrote:

Well.... That is what section 527 of the tax code specifically defines. There may be political groups that aren't 527s but they don't get the tax-free status that a 527 would get and they'd have to play by whatever rules are setup for whatever section of the tax code they'd fall under.

You didn't answer my question. Are there not non-profit, tax exempt organizations that are not churches that engage in political activities?

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Ummm.. No. Educational institutions can fall under 501(C)(3) but those that do can not participate in partisan politics.

Define participate.

Even the Christian Coalition can pass out voter guides at churches in order to compare and contrast candidates' positions on campaign issues with the intent being to tell the church members which candidates they should support. If this isn't politics, what is it?

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I'd guess that you might get away with it for a while but eventually someone would complain to the IRS and you've get investigated. They'd make a determination based on the rules that they've published. If you violated them you'd no longer be a 501(c)(3).

What would happen if a student in a public school complained about the indoctrination practices of a highly partisan civics or history teacher?

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That would be up to Florida now wouldn't it? There is no Federal mandate that cities or states provide any group with property tax exemptions. Each state is free to set it's own laws in that regard and I have no idea how Florida handles property taxes with 527s.

I'm just pointing out something that a church must consider when it applies for its tax status.

Apparently you are having troubles remebering what your question was. What you asked was "So every political organization is a 527? ".

But to answer your latest question - yes, there are. 527 organizations are one example.

Participate (in this context) = Apply to the IRS for, obtain and maintain 501(c)(3) tax exempt status.

When did the Chirstian Coalition become a church???