October 15, 2010
‘Separation of church and state’ is not to blame
(Related story: Guidelines for Pastors and Parishes on Lobbying and Electioneering)
Did you know . . .
- The prohibition against political campaign activity for Catholic organizations is “interpreted as absolute,” according to the United States Conference of Catholic Bishops.
- Catholic organizations may engage in lobbying activities if lobbying is not a substantial part of their total activities.
- The prohibition against political campaign activity does not come from the “separation of church and state.” The prohibition applies to all section 501(c)(3) organizations.
- An exempt organization has a choice between involvement in political campaign intervention and the benefits of tax exemption.
Following are excerpts from guidelines of the United States Conference of Catholic Bishops.
What does section 501(c)(3) of the IRC say about political campaign activity? Section 501(c)(3) of the IRC prohibits organizations that are exempt from federal income tax under its provisions, including Catholic org-anizations exempt under the USCCB Group Ruling, from participating or intervening in political campaigns on behalf of or in opposition to any candidate for public office. This prohibition has been interpreted as absolute.
How does the IRC limit lobbying activity by Catholic org-anizations? The IRC limits the amount of lobbying in which section 501(c)(3) organizations may engage. Under section 501(c)(3), Catholic organizations may engage in lobbying activities only if they do not constitute a substantial part of their total activities, measured by time, effort, expenditure and other relevant factors. Neither the IRC nor the regulations define what is “substantial” in this context. A few cases suggest that the line between what is substantial and what is insubstantial lies somewhere be-tween 5 percent and 15 percent of an organization’s total activities. IRS does not endorse any particular percentage safe harbor, but would clearly be more comfortable at the lower end of the spectrum.
Where did the political campaign intervention prohibition come from? Contrary to popular belief, the section 501(c)(3) political campaign intervention prohibition is not a manifestation of Constitutionally-mandated “separation of church and state.” The prohibition ap-plies to all section 501(c)(3) org-anizations, not just churches and religious organizations. The political campaign intervention prohibition was introduced by then-Senator Lyndon B. Johnson during Senate floor debate on the 1954 version of the tax code. LBJ appears to have been reacting to the support provided Dudley Dogherty, his challenger in the 1954 primary election, by certain tax-exempt organizations. There is no legislative history to explain definitively why LBJ sought this amendment to the IRC. However, there is no evidence that religious organizations were his targets.
Doesn’t the First Amendment protect the rights of Catholic organizations to engage in political campaign activity? As part of the federal tax law, the section 501(c)(3) political campaign intervention prohibition is not an absolute prohibition against political activity by tax-exempt organizations. Rather, it is a condition placed on the receipt of federal tax exemption. Thus, an exempt organization has a choice between involvement in political campaign intervention and the benefits of tax exemption. Because of this distinction, courts have not been sympathetic to claims by religious organizations that the section 501(c)(3) political campaign in-tervention prohibition violates First Amendment rights. For example, a few years ago the application of the political campaign intervention prohibition to revoke the section 501(c)(3) tax exemption of a New York church was upheld in the face of the church’s challenges under the free exercise clause of the First Amendment and the Re-ligious Freedom Restoration Act.