Exempt Organizations Advisory - Steptoe & Johnson LLP Exempt Organization Advisory -- IRS Releases Revenue Ruling and Report Regarding 501(c)(3) Political Activity

By:       Suzanne Ross McDowell (smcdowell@steptoe.com)
            Catherine W. Wilkinson (cwilkinson@steptoe.com) 

On June 1, the IRS released Revenue Ruling 2007-41, which provides twenty-one examples which illustrate the application of facts and circumstances in determining whether a section 501(c)(3) charitable organization has participated in, or intervened in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

The “factual situations” provided as examples include voter education, voter registration and get out the vote drives; individual activities by organization leaders; candidate appearances; candidate appearances where speaking or participating as a non-candidate; issue advocacy vs. political campaign intervention; business activity; and web sites. 

The IRS also released its Report on the Political Activity Compliance Initiative for the 2006 election cycle.  According to the IRS, this report, PACI 2006, follows the report on prohibited political intervention in the 2004 election cycle, which was issued in February 2006.