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In an election year, institutions should be clear on ensuring that you do not “cross the line” into what the IRS would consider “political activity.”

 

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 publishes a quarterly alumni magazine in print and electronic formats.  Along with photos and articles of interest to graduates of the college, the publication features a “How Are We Doing?” section where alumni send in updates of their lives and careers to be included for others to read.  A recent issue included the following update, “Alumnus Albert, of the class of 2008 is running for State Senate in Wyoming.”  (MBC is not in Wyoming.)

The Accounting Team at MBC saw this and called us.  “Have we intervened in a political campaign by publishing this?”

“No,” we tell them.  “The magazine only contains a statement of fact.  It does not contain any reference to this election or to the alum’s candidacy.  There is no endorsement of the candidate or discussion of the election or issues.  It would be good for you to review Revenue Ruling 2007-41 to find out more about this and other issues regarding prohibited political activity.”

Further, we tell them that Section 501(c)(3) 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.”

 

RULES

From Revenue Ruling 2007-41:

Situation 12.

University X is a section 501(c)(3) organization. X publishes an alumni newsletter on a

regular basis. Individual alumni are invited to send in updates about themselves which are printed in

each edition of the newsletter. After receiving an update letter from Alumnus Q, X prints the following:

“Alumnus Q, class of ‘XX is running for mayor of Metropolis.” The newsletter does not contain any

reference to this election or to Alumnus Q’s candidacy other than this statement of fact. University X

has not intervened in a political campaign.

Revenue Ruling 2007-41 is a great resource to have in your “toolkit.”  For those of you who are “Tax Tips” regulars, you know that I’m a big fan!

Find out more at:

https://www.irs.gov/charities-non-profits/charitable-organizations/political-campaign-intervention-by-501c3-tax-exempt-organizations-educating-exempt-organizations

 

BOTTOM LINE

  • 2020, of course, is an election year.  Rev. Rul. 2007-41 should be reviewed by all finance/accounting teams in an election year.
  • Section 501(c)(3) expressly prohibits charities – including schools – from participating in, or intervening in any political campaign on behalf of (or in opposition to) any candidate for public office.
  • Christian colleges should be diligent to ensure that you do not participate or intervene in “political activities.”
  • If you’d like a copy of IRS Rev. Rul. 2007-41, please email us and we will send you a PDF copy.

 

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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