[EL] 501(c)(3) political activity (Was: CCP Emergency SCOTUS relief)

Sat May 16 09:06:44 PDT 2015

Mr Zall:

 Calm down!   I misstated and  you misunderstood me.  You are
correct--there is no permitted partisan political activities.  The 501 (h)
reference is to lobbying and advocacy and not to partisan political
activities. I never said there was an exception.  My first paragraph I
thought made that clear while my second paragraph never refers to partisan
activity.

Part of the problem here is the the word "political" which is not a term of
art.  Advocacy for issues and lobbying are permitted activities, up to a
point, for all non profits according to IRS rules, but some may or may not
consider such activity political.  I would simply say that since that my
statement that "501 c 3 groups are allowed to do a certain amount of
political advocacy or lobbying" is correct since I think advocacy and
lobbying are political but they are nonetheless permitted as legal
activities under IRS rules.

On Sat, May 16, 2015 at 8:46 AM, <BZall at aol.com> wrote:

>  Yikes! No, no, no. Misleading at best; more likely a misunderstanding of
> the limits of 501(c)(3) "political" activity and a conflation of lobbying
> and election-related activity. Here is the Alliance for Justice's 501(c)(3)
> election checklist, which is accurate and much more detailed:
> http://bolderadvocacy.org/wp-content/uploads/2012/05/Election_Checklist_for_501c3_Public_Charities.pdf.
>
>
> The first paragraph of Prof. Schultz's post is correct, depending on the
> definition of "some types of 'political' [my quotes] activity." It would be
> more accurate to say that 501(c)(3)s' ISSUE-ORIENTED activity need not stop
> during election periods. *Fed. Election Comm’n v. Wisconsin Right To
> Life, Inc.*, 551 U.S. 449, 474 (2007) (“Discussion of issues cannot be
> suppressed simply because the issues may also be pertinent in an
> election.”).
>
> The concept is known informally as "injecting an issue into a campaign"
> and is widely recognized. See, e.g., the IRS's internal training manual
> ("CPE") for FY 2002: http://www.irs.gov/pub/irs-tege/eotopici02.pdf, at
> pp. 344-346:
>
> Basically, a finding of campaign intervention in an issue advertisement
> requires more than just a positive or negative correspondence between an
> organization's position and a candidate's position. What is required is
> that there must be some reasonably overt indication in the communication to
> the reader, viewer, or listener that the organization supports or opposes a
> particular candidate (or slate of candidates) in an election; rather than
> being a message restricted to an issue. As is stated in TAM 1999-07-021
> (May 20, 1998), in order to violate the political campaign prohibition, an
> advocacy communication "should contain some relatively clear directive that
> enables the recipient to know the organization's position on a specific
> candidate or slate of candidates." This statement was made in the context
> of a determination that an organization did not participate or intervene in
> a political campaign when, a few days before Congressional elections, it
> distributed an "I'm Fed Up With Congress" communication that also
> encouraged its recipients to vote and to assure that others voted.
> *Id*. at 345-46. Note: this is not the same as the FEC's "express
> advocacy" standard.
>
> The second paragraph is confused and wrong. There is no de minimis test
> for political activity by 501(c)(3) organizations, much less a "substantial
> part" test. From the Internal Revenue Manual (the IRS's description of
> policies and procedures):
>
> *4.76.3.13  (04-01-2003)*
>
>
> *Political Activities Guidelines*
>
>
> There is an absolute prohibition on all IRC § 501(c)(3) organizations from
> participating or intervening in any political campaign. Even an
> insubstantial amount of political activity can lead to the revocation of
> the organization’s exempt status.
>
> More to the point, courts have repeatedly rejected this analysis:
>
>  In United States v. Dykema, 666 F.2d 1096, 1101 (7th Cir. 1981), the
> Seventh Circuit stated: "It should be noted that exemption is lost . . . by
> participation in any political campaign on behalf of any candidate for
> public office. It need not form a substantial part of the organization's
> activities." The Second Circuit agreed with this position when it held that
> an organization did not qualify as an IRC 501(c)(3) organization because it
> rated judicial candidates as a very minor part of its total activities.
> Association of the Bar of the City of New York v. Commissioner, 858 F.2d
> 876 (2d Cir. 1988), cert. denied, 490 U.S. 1030 (1989). The court rejected
> the organization's contention that the substantiality requirement from the
> lobbying activity limitations be applied to the political campaign activity
> prohibition. Citing United States v. Naftalin, 441 U.S. 768, 773 (1979),
> the court stated: "The short answer [to this argument] is that Congress did
> not write the statute that way." Id. at 881. The court noted that the IRC
> 501(c)(3) prohibition against participation or intervention in political
> campaigns was added some twenty years after the statutory restriction on
> lobbying. Therefore, the court concluded: "Had Congress intended the added
> exception to apply only to those organizations that devote a substantial
> part of their activity to participation in political campaigns, it easily
> could have said so. It did not." Id. at 881.
>
> 2002 CPE, supra, at p. 352.
>
> As the IRS CPE excerpt shows, the lobbying test is quite different, and
> shouldn't be combined with the political analysis. 501(c)(3)s CAN lobby,
> but only to a limited extent, determined by whether the organization elects
> the "mechanical test" of IRC sections 501(h)/4911 or uses the "default",
> non-electing test.
>
> While Prof. Schultz may be well-meaning and his beliefs
> heartfelt, his description is not accurate. His statement that "those of us
> who are not naive suspect ..." is, therefore, itself suspect.
>
> Barnaby Zall
> Of Counsel
> Weinberg, Jacobs & Tolani, LLP
> 10411 Motor City Drive, Suite 500
> Bethesda, MD 20817
> 301-231-6943 (direct dial)
> bzall at aol.com
>
>  In a message dated 5/16/2015 8:29:36 A.M. Eastern Daylight Time,
> dschultz at hamline.edu writes:
>
> 501 c 3 are barred from engaging in partisan politics but they are not
> prevented in toto from engaging in some types of political advocacy or
> activity either at the state or federal level.
>
> 501 c 3 groups are allowed to do a certain amount of political advocacy or
> lobbying so long as these activities are not a substantial part of the
> organization.  The nature and amount of these activities are determined by
> law or IRS rules and often these groups elect  for the expenditure test
> under 501 (h) to address any uncertainty in determining what is a
> substantial part.
>
>

-- 
David Schultz, Professor
Editor, Journal of Public Affairs Education (JPAE)
Hamline University
Department of Political Science
1536 Hewitt Ave
MS B 1805
St. Paul, Minnesota 55104
651.523.2858 (voice)
651.523.3170 (fax)
http://davidschultz.efoliomn.com/
http://works.bepress.com/david_schultz/
http://schultzstake.blogspot.com/
Twitter:  @ProfDSchultz
My latest book:  Election Law and Democratic Theory, Ashgate Publishing
http://www.ashgate.com/isbn/9780754675433
FacultyRow SuperProfessor, 2012, 2013, 2014
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