Guides set the record straight on political activity by churches

By K. Hollyn Hollman

Church-State Intersection
October 9, 2002

As soon as the House of Representatives rejected H.R. 2357, the bill's primary co-sponsor promised to continue the fight. Though unsuccessful, proponents of politicking in the pulpit demonstrated ingenuity in their arguments and a willingness to lobby vigorously. Whatever their plans for next time, they will likely continue to have trouble selling their main argument — that the bill is needed because churches are silenced under the current law.

Two new publications provide useful information on the federal tax laws that apply to churches and other nonprofit organizations, known as 501(c)(3)s. Both publications are tailored to help houses of worship and offer clear answers to some of the most troublesome questions in this area. And, both illustrate that those who claim houses of worship cannot "speak out on the moral issues of the day" are dead wrong.

The first publication is the revised Tax Guide for Churches and Religious Organizations. Published by the IRS Tax Exempt and Government Entities Division, it explains the rules for maintaining tax-exempt status and encourages churches voluntarily to comply with the law. You can get a copy of the guidelines through the IRS website, www.irs.gov, or by contacting the IRS directly.

The second publication, recently released by the Pew Forum on Religion and Public Life, is Politics and the Pulpit: A Guide to the Internal Revenue Code Restrictions on the Political Activity of Religious Organizations. Drafted by attorney Deirdre Dessingue, it is a more narrowly tailored, user-friendly guide on the specific questions raised in the recent legislative debate.

As described in these publications, the restrictions on churches and religious organizations fall into two main categories. The IRS rules provide that no organization (religious or otherwise) can qualify for 501(c)(3) tax-exempt status: 1) if a "substantial part of its activities involve lobbying specific legislation"; or 2) if the organization acts by "directly or indirectly participating, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office."

On the question of lobbying, the guidelines make clear that religious organizations have the right to advocate moral and ethical positions such as opposition to a state lottery, but must not devote "a substantial part" of activities toward influencing specific legislation. The determination of whether lobbying constitutes a substantial part of a church's activities is not based on a bright-line rule but according to all the facts and circumstances in the case. While the standard is admittedly vague, the guidelines and case law interpreting the standard demonstrate that there is considerable leeway for churches to make their positions known on issues of concern. As a rule of thumb, tax specialists suggest that 5 percent to 20 percent is acceptable.

On the question of political campaign activity, the tax laws clearly prohibit any direct "contributions to political candidates or public statements made in direct support or opposition of any particular candidate" by the religious organization or church. However, even in the area of elections, churches can be involved. For instance, voter "education activities" conducted in a non-partisan manner, such as voter registration or get-out-the-vote drives are permitted as long as one candidate is not favored by these activities. Even "voter guides" can be produced if they are non-partisan, expansive (covering a broad range of issues), and objective, comparing only candidate positions, not advocating one candidate over another candidate.

I recommend both of these new guides. A quick review will reveal that the rules governing churches are not nearly as burdensome as Rep. Jones and company have suggested.