The Dangers of Political Involvement
Many times, especially during a major election year, churches and religious organizations want to be involved in the political process. Under some circumstances certain activity is permissible. However, involvement in this area may be dangerous for tax-exempt organizations, including churches and religious organizations, because some activities can jeopardize their exempt status.
As a rule, churches may not participate, or intervene, in a political campaign on behalf of, or in opposition to, a candidate for public office. IRS regulations state that intervention in campaigns includes making oral statements or publishing written statements for or against a candidate. (This information can also be found in the IRS publication: “Tax Guide for Churches and Religious Organizations”.) The ban against political activity, therefore, includes endorsing, contributing to, working for, or otherwise supporting or opposing any candidate for public office.
The intervention does not have to be substantial in terms of time or money to cause the loss of an organization’s exempt status and denial of deductions to donors for gift, estate and income tax purposes. According to the IRS, whether a church is participating or intervening in any political campaign on behalf of or in opposition to any candidate for public office depends upon all of the facts and circumstances of each case.
Some states (Texas, for example) also have statutes which prohibite nonprofit corporations from participating in certain political activities. This recent article about a pastor in El Paso, Texas, is a reminder that these rules are real and can be enforced against your organization.