One last related note, which may put to the test how strongly the IRS will pursue apparent violations of the political campaign intervention ban by churches.  With respect to the Iowa retention elections, USA Today reported a few days ago that at least one pastor intended to urge his congregation to vote against retention.  So once the IRS has sorted out its procedures for examining churches, it will be interested to see not only whether the IRS begins audits of churches on this issue but also whether it starts imposing penalties that go beyond  mere warning letters, which have been its primary reaction in such situations in recent years.

 

 

Lloyd and I can discuss this forever, but I at least promise not to.   In past recent election cycles, the IRS engaged in a Political Activity Campaign Initiative. Here is an excerpt from a recent article of mine describing its results in connection with churches:

 

Based on referrals, it examined possible political activity among some 100 exempt organizations in each of the 2004, 2006, and 2008 election cycles.  Results are available for 2004 and 2006.  For both election cycles, the most common violations identified as being those of the 40+ churches among those organizations selected for examination were distribution of printed documents supporting candidates,  statements endorsing candidates during normal services, well-known individuals endorsing a candidate at an official church function, candidates speaking at official functions, and distributions of partisan voter guides.

 

    Although the statutory prohibition by its terms is absolute such that even a de minims amount of political campaign intervention could result in loss of exemption, the IRS did not revoke exemption in any of these cases.  Neither did it impose the available excise tax of 10% on political campaign intervention expenditures. It instead issued written advisories because either the act of intervention was shown to be an anomaly or because the organization corrected the intervention and took steps to prevent future intervention.

 

I note that this year, however, there has been no announcement of such an initiative, in part, we Exempt Organization lawyers believe, because the IRS is still in the process of finalizing revised regulations that establish its procedures for examining churches.  

 

  Ellen

 

 

The applicable statutory language prohibits an organization that is eligible to receive tax deductible charitable contributions, including a church, from “participat[ing] in, or intervene[ing] in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”  While the statute does not define “public office,” that term has been interpreted by both the IRS and the courts to included elected judicial positions (see Association of the Bar of the City of New York v. Commissioner, 858 F.2d 876 (2d Cir. 1988)).  While I am not aware of any IRS guidance or court rulings with respect to retention elections for judges, I agree with Ellen that the best reading of the existing guidance is that such elections are within the scope of the prohibition.

 

As Doug notes, however, an individual pastor is free to support or oppose candidates of any type as long as they do so without using church resources or communication platforms.  The key question with respect to the Iowa election is therefore whether the pastors involved were only acting in their individual capacities or whether instead they were speaking from the pulpit, urging their congregations to vote no on these judges.  I should also note that the IRS has shown a reluctance to enforce the prohibition in the pulpit context, at least based on the apparent lack of enforcement activity with respect to the “Pulpit Freedom Sunday” initiative launched by the Alliance Defense Fund in 2008 (see also my BU Law Review piece on this issue).

 

Lloyd Hitoshi Mayer

Associate Professor

Notre Dame Law School

P.O. Box 780

Notre Dame, IN 46556-0780

Phone: (574) 631-8057

Fax: (574) 631-4197

Web Bio: http://law.nd.edu/faculty/lloyd-hitoshi-mayer

SSRN Author Page: http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=504775