How NOT to Lose Your Church’s Tax Exempt Status During Election Season

Church congregations are often (understandably) concerned with the outcomes of local, state, and most especially, national elections. While there’s nothing wrong with facilitating a political conversation among your members, it is important that church leaders take precautions so as to not harm their standing with the Internal Revenue Service (IRS).

Losing the 501(c)(3) tax-exempt status is a potentially devastating blog to a ministry. Here’s how you can make sure you keep yours during this next election cycle.

1) Discuss policy, not politicians

It is perfectly acceptable for a tax-exempt organization to discuss and even state support for or against a general issues (abortion, gay marriage, financial stewardship, etc.), however divisive that may be. However, the church must not appear to show support for or opposition to a specific candidate or piece of legislation.

According to Brotherhood Mutual, our partner company, "A church or other non-profit can violate the regulations simply by showing a picture of the candidate, referring to a political party, or using facts unique to the candidate's platform or biography."

Be careful to focus on the issues that affect your church, but not to address the particular candidates.

2) Do not distribute any official literature from other organizations...

…Unless you are absolutely certain that the content therein are deemed "permitted speech" according to the U.S. tax code. Since this is quite difficult to be sure of, it is best to avoid this problem altogether by only distributing your own literature.

3) Avoid business activity that is political-in-nature

For example, renting of building grounds to an organization whose purpose is to raise funds for a particular candidate can create an unnecessary risk to the ministry. If it is deemed by the IRS that the activity in question favored one part or candidate unfairly, this could be grounds for the removal of 501(c)(3) status.

As a general rule, it is advisable to keep all lessons, sermons, announcements, or other messages focused on Biblical or spiritual issues. Election season is no doubt a troubling time for churches and it is understandable that church leaders may want to speak out, but one must consider if it is worth risking tax-exempt status.

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