Taxes & the Campaign Season: Words of Caution
In this campaign season, nonprofit organizations must be aware of IRS regulations governing online political activities.
Under the Internal Revenue Code (“IRC”), a tax-exempt 501(c)(3) organization is required to devote its resources to educational, religious, scientific, or other charitable activities. It is strictly forbidden from supporting or opposing a candidate for political office and doing so jeopardizes its tax-exempt status.
To comply with the IRC section 501(c)(3) prohibition on political campaign intervention, a public charity must ensure that its website and other online activities do not directly or indirectly endorse or oppose candidates.
An Organization’s Own Website
A 501(c)(3) organization may not use its website for political activity, its staff may not make speeches on behalf of candidates, and its newsletter or other publications may not endorse candidates. Keep in mind that the IRS will examine the content of an organization’s website as a whole, rather than considering whether a particular web page constitutes political intervention.
Links to Other Websites
Non-profit organizations are responsible for all content on their websites and for links to other sites, and the IRS will examine all web pages that have links. Only in very narrow situations may a 501(c)(3) link to a website with political content. The IRS provides an example of a hospital website with an acceptable linking to a newspaper’s website. Even though the newspaper's website includes its editorial endorsements of candidates, the link is permitted because:
- Material is related to the hospital’s tax-exempt mission (in this case, an article praising the hospital’s treatment program for a particular disease).
- There are no links from the hospital website to the endorsements.
- There is no other context related to the links to indicate the hospital was supporting or opposing any candidate.
After establishing a web link, there is an ongoing responsibility to monitor it. If an external website changes its content, the 501(c)(3) organization may be liable for conducting political activity, even though the link was permissible at the time it was posted.
The information provided above is specific to 501(c)(3) organizations. Separate guidance is available for 501(c)(4) organizations and Political Action Committees (PAC).
PYA welcomes the opportunity to discuss with you further any of the information provided above. Please contact Debbie Ernsberger or Elizabeth Wright at (800) 270-9629.
WE ARE REQUIRED BY IRS CIRCULAR 230 TO INFORM YOU THAT THE FOLLOWING DISCUSSION WAS NOT INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED, NOR RELIED UPON, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW. THE ADVICE WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED IN THE DISCUSSION. EACH TAXPAYER SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.