A Catholic anti-abortion group, Catholic Answers, recently announced it will form a new organization, Catholic Answers Action, after a 2004 complaint filed with the Internal Revenue Service (IRS) claimed its Voter's Guide for Serious Catholics was a partisan intervention in that year's election. The new group is a social welfare organization exempt under 501(c)(4) of the tax code, and is not subject to the ban on partisan activity that applies to charities and religious organizations under section 501(c)(3). It intends to publish a similar 2006 version of its voter guide.
The Internal Revenue Service's (IRS) new approach to enforcing the ban on partisan activities by charities and religious organizations has raised serious questions about the agency's interpretation of the law, about evenhanded enforcement, and about the appropriateness of an approach aimed at deterring speech. This report summarizes the Political Activities Compliance Initiative (PACI) and new compliance guidance from the IRS, and raises questions that must be addressed to ensure charities and religious organizations can continue to play their essential role in public policy debates.