ISSUE

The “repeal” of the “Johnson Amendment” has not happened (yet).  In this election year, institutions should be aware of the rules regarding political campaign intervention.

 

SITUATION

Marathon Bible College (MBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii).  They are required to file Form 990 annually.

MBC is building a new dorm. Their President invites Congresswoman Mary P. Knews, the representative for the district containing MBC, to attend the groundbreaking ceremony for the new dorm. Congresswoman Knews is running for reelection at the time. MBC’s President makes no reference in her introduction to Congresswoman Knew’s candidacy or the election. Congressman Knews also makes no reference to her candidacy or the election and does not do any political campaign fundraising while at MBC.  Per the IRS, MBC has not intervened in a political campaign.

 

RULES

From Revenue Ruling 2007-41:

Candidate Appearances Where Speaking or Participating as a Non-Candidate

Candidates may also appear or speak at organization events in a non-candidate capacity. For instance, a political candidate may be a public figure who is invited to speak because he or she: (a) currently holds, or formerly held, public office; (b) is considered an expert in a non political field; or (c) is a celebrity or has led a distinguished military, legal, or public service career. A candidate may choose to attend an event that is open to the public, such as a lecture, concert or worship service. The candidate’s presence at an organization-sponsored event does not, by itself, cause the organization to be engaged in political campaign intervention. However, if the candidate is publicly recognized by the organization, or if the candidate is invited to speak, factors in determining whether the candidate’s appearance results in political campaign intervention include the following:

  • Whether the individual is chosen to speak solely for reasons other than candidacy for public office;
  • Whether the individual speaks only in a non-candidate capacity;
  • Whether either the individual or any representative of the organization makes any mention of his or her candidacy or the election;
  • Whether any campaign activity occurs in connection with the candidate’s attendance;
  • Whether the organization maintains a nonpartisan atmosphere on the premises or at the event where the candidate is present; and
  • Whether the organization clearly indicates the capacity in which the candidate is appearing and does not mention the individual’s political candidacy or the upcoming election in the communications announcing the candidate’s attendance at the event.

Situation 11. Chairman H is the chairman of the Board of Hospital Q, a section 501(c)(3) organization. Hospital Q is building a new wing. Chairman H invites Congressman Z, the representative for the district containing Hospital Q, to attend the groundbreaking ceremony for the new wing. Congressman Z is running for reelection at the time. Chairman H makes no reference in her introduction to Congressman Z’s candidacy or the election. Congressman Z also makes no reference to his candidacy or the election and does not do any political campaign fundraising while at Hospital Q. Hospital Q has not intervened in a political campaign.

 

BOTTOM LINE

  • Revenue Ruling 2007-41 is a great source of information – what your institution can and cannot do – in an election year.
  • Internal Revenue Code Section 501(c)(3) still states, “…and which does 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 office.”
  • It is possible for candidates to speak at your school without it being considered “political campaign intervention.”
  • Your school can mention “what’s going on” with alumni who are political candidates – but within guidelines.

Specific questions? Email Dave Moja

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.

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