I recently read an article in the September edition of
the Journal of Accountancy called “Ban on political activities: An
election-year warning for charities” by Claudia L. Kelly, CPA, PH.D., and F.
Douglas Roberts, CPA, PH.D. (http://journalofaccountancy.com/Issues/2012/Sep/20125671). The
article addresses non-profit organizations and political campaign
activities.
Non-profit organizations continue to catch the
attention and scrutiny of the IRS. With it being an election year,
the IRS is looking for political campaign activities of 501( c)(3) tax exempt
organizations. The article provides links to resources providing
guidance and examples concerning political campaign activities. The
article states that a good place to start is Rev. Rul 2007-41 which provides examples
of acceptable and unacceptable activities. The article noted
above discusses non-profit organizations and the effect of:
- its leaders and other individuals activities,
- candidate speakers and forums,
- issue advocacy vs. political intervention,
- printed materials, websites and social media,
- business activity,
- consequences or political campaign activity,
- advising the organization and its members.
The article describes multiple tips for non-profits to prevent activities from being classified as
political. Organizations should have a written policy that prohibits
political activities and describes what activities are unacceptable. In
addition, organizations should issue disclaimers in any printed material or in
any public speeches by members of their organization so it is not misconstrued
that the member is acting on behalf of the organization. The
organization should not use or allow the use of its facilities to sponsor
political campaign activities. Any activities involving political
candidates should be presented as educational and should not promote the
candidate.
Auditors and tax preparers of non-profit
organizations should be on the look-out for disallowed political campaign
activities. Certain types of activity could lead to fines and/or
loss of the organization’s tax exempt status. Political campaign
activities are required disclosures on the Form 990 and if such activities
could result in a loss of exempt status, auditors of an organization may need
to consider disclosure in the financial statements.
Megan Schuler, CPA
