IRS Representative Discusses Important Issues for Public Charities

At an American Bar Association teleconference, Judy Kindell, senior technical adviser to the Internal Revenue Service (IRS) director of exempt organizations, commented on some important issues for charities. BNA Money and Politics ($$) reported on Kindell's comments. 501(c)(3) organizations are "prohibited from engaging in campaign activity, defined as any activity that favors or opposes candidates for public office. This can include endorsement of candidates, contributions to candidates or to political action committees, public statements for or against particular candidates, and distributing materials prepared by the organization or other organizations that favor or oppose candidates." 501(c)(4), (c)(5), and (c)(6) organizations can get involved in campaign activity as long as it is not their primary activity. Kindell also commented on the Political Activity Compliance Initiative (PACI) that began in 2004. "IRS has only revoked the tax exemption of five organizations—one of them was not even for political activity—and has made its main goal to educate tax-exempts on the issues. Where necessary, IRS also issues letters telling them there is no change in their tax status but advising them not to engage in prohibited activities again." For more on the PACI program, see our IRS enforcement resource center. Another important topic touched upon was lobbying and the notion that 501(c)(3) groups are not allowed to lobby, which is not true. "Eric Gorovitz, counsel with Adler & Colvin in San Francisco, focused on the lobbying rules, saying he hoped to dispel a widely held myth that lobbying is somehow inappropriate for charities. [. . .] 'Charities that work on issues where there is a community that is underserved, or where stories have been left out of policy debates, are expressly empowered to participate in those debates,' he said."
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