BNA Money and Politics (subscription required) reported that the tax-exempt status of charities and other nonprofits will continue to be examined into 2007. On Tuesday the Urban Institute sponsored a forum geared toward nonprofits, at which a Senate Finance Committee aide remarked that the committee will investigate the role of tax code Section 501(c)(3) and 501(c)(4) organizations in politics, including hospitals and universities.

On Sept. 27, 2006 Sen. James Inhofe (R-OK) introduced the Religious Freedom Act of 2006 (S. 3957), to protect houses of worship or meditation from losing their tax-exemption when they speak out on "public issues, election contests, and pending legislation made in a theological or philosophical context." Inhofe has introduced this legislation with the backdrop of recent IRS investigations into churches alleging that partisan politics was mixed into sermons. However, current law already allows religious organizations to discuss the issues of the day, but not to endorse or oppose candidates.

The LA Daily News reported that the nonprofit status of numerous houses of worship throughout California was put at risk when financial donations were given to political candidates that came from collection plates. These cases of campaign contributions clearly act as political campaign activity. Some church officials cited in the article claimed they were unaware of the problem until the candidate returned the money.

On Sept. 25, 2006 the AFL-CIO, Chamber of Commerce, National Education Association and OMB Watch issued a statement about the impact of McCain-Feingold's "electioneering communications" rule on grassroots lobbying campaigns. The statement notes that Sept. 8, 2006 marked the beginning of a 60-day pre-election blackout period for broadcasts by nonprofits, unions and business corporations to air a message that simply asks citizens to contact representatives in Congress to vote yes or no on a bill.