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

Sat May 16 09:11:01 PDT 2015

Note to self:  Always spell check and proof.  Here is my corrected second
paragraph:

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  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 11:06 AM, Schultz, David A. <dschultz at hamline.edu>
wrote:

> 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
>

-- 
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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