Wednesday, January 21, 2009

501(c)3s and Politics

Prop 8, tax free, exemption, irs, property transfer, homosexual, marriage

So, the Prop 8 crowds new meme is that the taxing of a church by the City of San Francisco is payback for the church's members voting yes on Prop 8. Wow, that seems like illegal and immoral discrimination against people for voting as they wanted, doesn't it?

Sorry, no.

See, churches and other charitable organizations are organized under Section 501(c)3 of the United States Tax Codes. Tax exempt status is a privilege, not a right. Simply being nice, or charitable, or a church, does not entitle one to tax exemption. There are very specific rules and requirements for tax exempt status.

From the IRS website:

In 1954, Congress approved an amendment by Sen. Lyndon Johnson to prohibit 501(c)(3) organizations, which includes charities and churches, from engaging in any political campaign activity. To the extent Congress has revisited the ban over the years, it has in fact strengthened the ban. The most recent change came in 1987 when Congress amended the language to clarify that the prohibition also applies to statements opposing candidates.Currently, the law prohibits political campaign activity by charities and churches by defining a 501(c)(3) organization as one "which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office."

In campaigning for Prop 8, that is exactly what many churches have done- including a church which gave its members the "duty" to engage in political activities, including joining the Digital Network Army.

From a "Meet the DNA" comment section thejournalistachronicle admits:

When I joined the DNA, I wasn't all that interested in the cause, I just wanted to make sure I fulfilled my duties at church and the assignments I was given, one being to join the DNA and help out there.

So, how were churches not engaging in politics?

In conclusion, if you want the privilege of tax exempt status, you must obey the rules. If you choose to disobey the rules, you must accept the consequences. (Something the DNA is all for when it comes to homosexuals, apparently not so much with churches.)


  1. Read the IRS quote a little more closely. Which political candidate exactly did the churches endorse? Prop. 8 had nothing to do with candidates for public office.

  2. it's actually not limited to candidates.

    (3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)*), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

    *(The “otherwise provided” clause does not apply, as a church, is a disqualified entity as described in subsection (h).)

  3. churches are allowed to register people to vote, drive people to the polls, provide information about ALL candidates, invite ALL candidates to speak on their premises (all candidates do not have to agree to speak, but all must be given the invitation), and engage in any activity in which the purpose can be demonstrated to be (a) encouraging voting, or (b) educating voters.

    promoting specific candidates, legislation or parties is forbidden.

    i work for a law firm that represents a number of 501(c)3's. every time an election comes around, we send out a very pointed letter regarding the tax codes regulations, as well as a warning that if they choose to violate those regulations, they can't expect us to be able to help them keep their tax exempt status.


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