Nonprofits Warned Against Political Campaigning July 27, 2006
Funding Tips & Trends
Churches and nonprofit groups risk losing their tax-exempt status if they engage in political campaigning, the IRS warns.
The Foundation Center reported July 19 that the IRS recently sent notices to 15,000 nonprofits, churches, and tax preparers outlining its Political Activity Compliance Initiative. The agency warns that it will immediately investigate claims of improper campaigning rather than waiting for a tax return to be filed or a fiscal year to end; a three-person panel will review complaints to determine if further action is needed.
"While the vast majority of charities and churches do not engage in politicking, an increasing number did take part in prohibited activities in the 2004 election cycle," said IRS commissioner Mark W. Everson.
Since 2004, more than 200 groups have been investigated by the IRS for political activity; 62 were found in violation of tax laws, 59 got warning letters, and three lost their tax-exempt status.