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
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.