Earlier this year, the Internal Revenue Service (“IRS”) released a new ruling that may signifi cantly affect certain taxexempt organizations. Revenue Ruling 2007-41 provides real-world examples illustrating the reach of the Internal Revenue Code’s prohibition on political campaign intervention for Section 501(c)(3) organizations. All Section 501(c)(3) organizations should become familiar with these examples to ensure their own compliance.


Under the Internal Revenue Code (“IRC”), organizations recognized as tax-exempt under Section 501(c)(3) are subject to an absolute ban on campaign political activity. Section 501(c)(3) organization may not “participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public offi ce,” even if the purpose of the activity is in keeping with the organization’s purpose as a taxexempt organization.

Whether an organization violates the ban on political intervention depends on all the facts and circumstances of each case. The IRS has broad discretion to determine whether violations have occurred and, if so, what penalties to apply. Violations of the ban on political activity can result in serious consequences: the IRS can levy an excise tax and/or revoke an organization’s tax-exempt status.

Revenue Ruling 2007-41

Revenue Ruling 2007-41 (the “Ruling”) clarifi es how the IRS enforces the ban on political intervention in practice, and, thus can serve as a useful aid for Section 501(c)(3) organizations seeking to predict how the IRS might view various activities. The Ruling addresses, among other issues, the following:

Voter Education, Registration and Get-Out-the- Vote Drives: Section 501(c)(3) organizations may prepare and distribute voter education guides and other educational materials, provided they are strictly nonpartisan and do not show bias or preference for the views of particular candidates in either their content or their structure.

Individual Activity by Organization Leaders: Leaders of Section 501(c)(3) organizations are not prohibited from speaking on political or public policy issues, provided they speak only for themselves, in a strictly personal capacity, and in no way reference, align or identify themselves with the organization without a clear disclaimer.

Provision of Goods, Services or Facilities: The IRS would consider the following relevant facts and circumstances to determine whether provision of goods, services or facilities is permissible under the IRC:

  • Whether the good, service or facility is equally available and accessible to candidates competing for the same offi ce during an election, and whether it is available only to candidates or more widely available to the general public.
  • Whether the rates and fees charged are customary.
  • Whether the activity is ongoing or conducted specifi cally for a candidate.

Candidate Appearances in Public Forums and Debates: Section 501(c)(3) organizations are permitted to invite candidates to speak at events. The propriety of such activities will depend, however, on whether:

  • The organization offers equal opportunities to participate to all political candidates.
  • The organization shows any support or opposition to the candidate either during the event or in communications made about or promoting the event.
  • Political fundraising occurs at the event.
  • Questions for multiple attending candidates are prepared and presented in a nonpartisan manner.
  • The topics addressed cover a range of issues.
  • Candidates are given equal presentation opportunities.
  • Candidates or moderators speaking after candidates are asked to agree or disagree with a statement of position.

Organizations also may invite candidates to speak or appear at events in a non-candidate capacity, but only if the individual speaks strictly within that capacity and does not mention or reference his or her candidacy, and if no campaign activity occurs in connection with that candidate’s appearance.

Issue Advocacy: Section 501(c)(3) organizations may lawfully express positions on issues of public policy even if those issues divide candidates running for public offi ce. However, the line between permissible issue advocacy and impermissible political intervention is often unclear. The IRS has asserted that impermissible political activity can arise in the context of issue advocacy not only by stating a candidate’s name, but also by other means such as showing a picture of a candidate, referring to political party affi liations, or noting other distinctive features of a candidate’s platform or biography.

The IRS will consider public policy communications in their specifi c context, including:

  • Whether the statement identifi es any candidate.
  • Whether the statement expresses support or opposition to a candidate(s) positions or actions.
  • The timing of the statement relevant to the election.
  • Any references to voting or to an election.
  • Whether the issue raised has been addressed as a distinguishing issue in relation to any candidate.
  • Whether the communication is part of an ongoing process apart from the election.
  • Whether the timing of the communication and identifi cation of the candidate are connected to a nonelection matter.

Internet Activity: Although a Section 501(c)(3) organization may use its Web site to express and circulate information, any posting on a Web site is treated as the equivalent of any other printed or broadcast communication, and is thus subject to the same restrictions on political campaign intervention under Section 501(c)(3). In particular, an organization must carefully monitor outside Web sites to which its own Web site links, ensuring that none constitute political campaign intervention as described above. Possible factors considered to ensure compliance include, for example, whether all candidates are represented on Web postings and the level of directness between the organization’s Web site and any Web page containing non-compliant material.

Section 501(c)(3) organizations should carefully review Revenue Ruling 2007-41, which can be accessed at http:// www.irs.gov/pub/irs-tege/rr2007-41.pdf.