Congress needs to define political do's and don'ts for nonprofits
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Among the promises made by Donald TrumpDonald John TrumpFive takeaways from Gillum and DeSantis’s first debate GOP warns economy will tank if Dems win Gorbachev calls Trump's withdrawal from arms treaty 'a mistake' MORE during the recent campaign was repeal of the “Johnson amendment,” the tax law provision that prohibits 501(c)(3) charities, including churches, schools, hospitals and foundations, from supporting or opposing candidates for office.


For more than 60 years, this rule — and another that applies to for-profit businesses — has meant that tax-deductible money cannot be used for partisan politics. It has guaranteed that Americans’ charitable giving will not be channeled into political campaigns. It has helped maintain the independent integrity of our charitable sector.


Congress has charged the Internal Revenue Service with enforcing federal tax law, including the difficult but essential task of distinguishing that which is political from that which is not.

Unfortunately, never, since 1954, has the IRS written clear tax standards defining political intervention. The IRS has relied on a vague, uncertain “we know it when we see it” approach that gives no reliable guidance to the nonprofit sector nor even to its own employees.

In 2013, the IRS came under fire after bungling its political testing of tea party exemption cases — a failure rooted in the lack of sound definitions.

In Nov. 2013, the IRS and Treasury Department began an effort to clarify those definitions, but were stopped when Congress tacked on an ideological rider cutting off funding for the effort until Dec. 9. 

Congress is returning and should allow the extraneous provision that stopped the rulemaking to expire. The way would then be clear for a second draft of rules that can be brought out into the sunshine of public commentary and public hearings.

Here are some examples of how problematic this lack of guidance has become:

1. During the campaign, Trump’s often-controversial statements on a variety of subjects dominated the national discourse. Charities that had worked for years on immigration reform, women’s rights, peace and disarmament, and mental health issues struggled to participate in this national conversation.

There is no safe harbor allowing a charity to respond to a candidate who attacks the organization or falsely represents its key issues. In the face of uncertain precedents, nonprofits often choose to remain silent, muting their voices when they are needed most.

2. Both conservative and liberal churches struggled with how ministers could address the religious implications for their congregations of issues raised during the election campaigns relating to candidates' character, attitudes, and stances on moral policy decisions.

3. IRS rulings that distinguish between broadcast political advertising for or against candidates, and “issue ads” that are unrelated to the election rely on multi–factor tests that can easily be manipulated.

The rules need to be tightened so that phony issue ads designed for no real purpose but to influence the election can’t be paid for with tax-deductible funds.

4. Many charitable groups wish to promote voter registration and turnout, encouraging their members and communities to get out and vote. But no guidance from the IRS defines nonpartisan messages for engaging voters, or what criteria can be used to select the target audience.

Without clear standards, nonprofit support for civic participation is chilled by the perceived risk of violating their tax-exempt status.

The lack of progress on IRS political rulemaking leaves us in the worst of both worlds: Scofflaws can abuse the tax system for political advantage while most nonprofits refrain from healthy engagement in nonpartisan civic speech for fear of loss of tax-exemption. Clear, predictable definitions in tax law would level the playing field and help everyone know and fully exercise their rights to speak.

Now that the election has ended, we should take a step back and consider how to expand and protect the nonpartisan civic space that nonprofits provide. Congress should allow the rider preventing progress on the IRS rulemaking to expire and open up the next draft to public discussion.

Repealing the Johnson amendment would open the floodgates to partisan exploitation of the goodwill and integrity established by our religious, educational, and community service groups over decades of philanthropic effort. 

Greg Colvin, of San Francisco, and Beth Kingsley, of Washington, DC, are nonprofit tax-exempt law practitioners serving as co-chairs of the Bright Lines Project Drafting Committee, sponsored by Public Citizen. Greg is Senior Counsel at Adler & Colvin San Francisco, and Beth is Partner at Harmon, Curran, Spielberg & Eisenberg.

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