The Internal Revenue Code prohibits intervention in political campaigns by organizations that are exempt from federal income tax under section 501(c)(3), including religious organizations. To qualify for 501(c)(3) tax-exempt status under the Internal Revenue Code, an organization must meet the following requirements:
- The organization must be organized and operated exclusively for religious, educational, scientific or other charitable purposes;
- Net earnings may not inure to the benefit of any private individual or shareholder;
- No substantial part of the organization’s activities may involve attempts to influence legislation;
- The organization may not intervene in political campaigns;
- The organization’s purposes or activities may not be illegal or violate fundamental public policy.
The IRS has noted that “[c]hurches that meet [these requirements] are automatically considered exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS.” However, “[u]nlike churches, religious organizations that wish to be tax-exempt generally must apply to the IRS for tax-exempt status unless their gross receipts do not normally exceed $5,000 annually.”2 Otherwise, this could result in the IRS taking tax resolution irs tax lien where neccesary for unpaid tax debt against their property.
The restrictions on political activities are some of the conditions of maintaining tax-exempt status. Although other restrictions – including state and local laws regulating various political activities as well as federal laws, such as the Federal Election Campaign Act – also may affect participation by religious organizations in the political process, the Internal Revenue Code prohibition is the primary focus of this publication.