WASHINGTON, June 3, 2008—In recent comments to the Internal Revenue Service (IRS) regarding the agency's guidance priorities for 2008-2009, OMB Watch reiterated the need for a bright-line rule that unambiguously defines prohibited political intervention activities for charities and religious organizations incorporated under Section 501(c)(3) of the Internal Revenue Code.

The Internal Revenue Service (IRS) has closed two investigations into accusations of illegal partisan electioneering by two religious organizations. The IRS determined that the United Church of Christ (UCC) did not violate its tax-exempt status by inviting Sen. Barack Obama (D-IL) to speak at the denomination's national meeting in 2007. The IRS also found Pastor Wiley Drake's endorsement of Mike Huckabee to be a personal endorsement and not made on behalf of his church, the First Southern Baptist Church in Buena Park, CA. The IRS concluded the two investigations relatively quickly, compared to cases from the previous two election cycles.

A proposed U.S. Agency for International Development (USAID) rule for international HIV/AIDS grantees has generated criticism and calls for change. If implemented, the proposed rule would force such grantees to choose between adopting government policy for their entire organizations or setting up completely separate affiliated organizations. Comments from OMB Watch, the Brennan Center for Justice, and two members of Congress contrast the harshness of the proposed separation requirements with the much more flexible standards the agency has adopted for its faith-based initiative.