Tax code prohibits churches from campaigning

Karen Sansone, director of the Tax and Compliance section of the Synod’s Accounting Department, reminds all LCMS entities that their efforts, if any, to “educate voters” must comply with Internal Revenue code requirements concerning political campaign activities.

The code, Sansone says, “absolutely prohibits” churches and other religious or charitable organizations from endorsing or opposing any candidate for public office.  However, these organizations can engage in advocating for or against issues and, to a limited extent, ballot initiatives or other legislative activities.

Whether or not a particular activity, action, or expenditure is considered a prohibited political activity depends on all the facts and circumstances in each case, she said.  For example, religious organizations may sponsor debates or forums to educate voters, but if the debate or forum shows a preference for or against a certain candidate, it becomes a prohibited activity.

The political activity ban does not restrict free expression by leaders of Synod entities who are speaking for themselves.  However, pastors and others who commonly speak or write on behalf of an LCMS entity must clearly indicate that their public comments in connection with political campaigns are strictly personal and not on behalf of the Synod or organization they represent, according to Sansone.

Partisan comments by employees or representatives of Synod organizations aimed at political candidates must never be made in official organization publications or at official church functions.

Entities that violate this prohibition could lose their tax-exempt status and/or be assessed an excise tax.  And, adds Sansone, contributions to organizations that lose their tax-exempt status are not deductible by donors for federal income tax purposes.

“The Internal Revenue Service knows that most churches want to follow the rules, so to help them it has made available some educational materials about political campaign activities,” Sansone said.  “Their use of practical scenarios helps churches understand the issues and avoid problems.”

For more information, see Publication 1828, Tax Guide for Churches and Religious Organizations, and Revenue Ruling 2007-41 at www.irs.gov/eo.

Posted May 22, 2008

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