Center Submits Comments, Requests Hearing, Regarding Proposed IRS Restrictions on Nonprofit Voter Education and Engagement

Washington, D.C. – February 27, 2014 – In response to a notice of proposed rulemaking by the IRS, the Center for Nonprofit Advancement, with the pro-bono legal assistance of Winston & Strawn LLP, has submitted comments opposing the new regulations and has requested that a public hearing be held to further discuss the issue. After hearing from concerned nonprofits, the Center took action on behalf of its members, who are 501(c)(3) organizations.

The regulations currently focus exclusively on Section 501(c)(4), known as social welfare organizations, and offer more specific guidelines on what constitutes political activity. Under these guidelines, activities that are currently considered non-political, like voter registration and get-out-the-vote drives, would now be considered “candidate-related political activity” and could lead to an organization’s tax-exempt status being revoked. In addition, the IRS is considering adopting these restrictions for Section 501(c)(3) organizations as well.

In the submitted comments, the CEO of the Center for Nonprofit Advancement, Glen O’Gilvie, writes “It would be extremely inadvisable for the IRS both to broadly define candidate-related political activity for Section 501(c)(4) organizations, and to apply such concept to 501(c)(3) organizations.” The Center is concerned that these restrictions will have a negative impact on the nonprofit community, inhibiting their ability to implement their respective missions.

O’Gilvie’s comments state that “Many activities included in the definition of “candidate-related political activity” are essential to maintaining a vibrant democracy,” and if Section 501(c)(3) were to fall under this new definition, they would be totally prohibited from engaging in activities like non-partisan voter education and voter registration. The Center worries that this could undermine the important role nonprofit organizations play in the democratic process.

One issue for 501(c)(3) organizations is the potential for inadvertent violations of the regulations. The proposed definition includes simply referring to political candidates. People who run for office are often involved in their communities and may be likely to have non-political connections to the activities of a nonprofit. Fear of losing tax-exempt status or a timely and costly IRS audit due to accidental violations may lead to organizations completely refraining from participating in these activities. The Center calls this a “chilling effect on the exercise of a nonprofit’s First Amendment rights.”

Further, the restrictions define candidate-related political activity to include any contribution to an organization that engages in candidate-related political activity. This would prohibit any giving to these groups, including contributions wholly unrelated to political activity. The Center describes this as “unnecessarily burdensome” as requirements are already in place to ensure 501(c)(3) organizations use funds appropriately.

The Center’s comments conclude by requesting a public hearing on the issue. If the IRS schedules a hearing, the Center has requested it be allowed to participate, and will be seeking the support of its members.

For an explanation of the proposed rule changes, click here. To read the full comments from the Center, click here.

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About the Center for Nonprofit Advancement:
The Center for Nonprofit Advancement strengthens the capacity of nonprofit organizations throughout Greater Washington, D.C.  The Center directly partners with nearly 1,000 nonprofits, helping them achieve their missions through training and technical assistance programs, networking, advocacy and group buying power.

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