Politics and the Church; What Every Pastor Needs to Know!

Written by Founder Raul Rivera on Nov 17, 2015 in IRS Compliance

On October 30, 1992, four days before the presidential election, Branch Ministries, a tax-exempt church in New York, placed two full-page adds in two national newspapers, expressing its concern about the moral character of candidate Bill Clinton. The advertisement proclaimed, “Christians Beware. Do not put the economy ahead of the Ten Commandments.”

The advertisement was encouraging Christians not to vote for Bill Clinton because of his stance on various issues. Furthermore, the advertisement cited various biblical passages and stated that “Bill Clinton is promoting policies that are in rebellion to God’s laws.” It concluded with the question, “How then can we vote for Bill Clinton?” At the bottom of each advertisement, the church stated that tax-deductible donations for the advertisement would be gladly accepted.

The advertisements came to the attention of the Regional Commissioner of the IRS, who notified the church on November 20, 1992 that he had authorized a church tax inquiry based on “a reasonable belief that you may not be tax-exempt or that you may be liable for tax” due to political activities and expenditures.

We will come back to the outcome of this case a little later.

Understanding the legal basis

Perhaps you are scratching your head at this point, not sure why the actions of Branch Ministries would solicit a tax inquiry from the IRS. After all, is free speech not a First Amendment right afforded to us all?

Well, yes, free speech is a constitutional right afforded to us all. However, in order to fully understand the Branch Ministries case, we need to understand the legal basis behind the IRS tax inquiry.

Section 501(c)(3) states that a tax-exempt organization may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates. Section 501(c)(3) is the legal basis for the limitation on legislative and political campaign activities of churches and religious organizations. In essence, there are two distinct limitations when it comes to your church engaging in politics.

  1. Churches may not engage in substantial efforts to influence legislation. (This is commonly referred to as lobbying.)
  2. Churches may not participate or intervene in any political campaign.

According to Publication 1828, Tax Guide for Churches and Religious Organizations, any section 501(c)(3) organization, including churches and religious organizations, that participate in such activities could possibly jeopardize its tax-exempt status.

Although Publication 1828 warns us that participating in such activities may jeopardize a church’s tax-exempt status, it also, somewhat helpfully, details such activities that do not jeopardize a church’s tax-exempt status.

Since we are less than a year from the 2016 presidential election, it is important for the church to familiarize itself with the regulations that are imposed upon its political participation as a tax-exempt organization.

Influencing legislation

Section 501(c)(3) prohibits religious organizations from engaging in “substantial” efforts to influence legislation. The meaning of “substantial” has been ill-defined by the Internal Revenue Service (IRS), thus leaving a lot up to interpretation. However, Publication 1828 tells us that,

“A church or religious organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation.”

This text gives us the parameters of what attempting to influence legislation looks like. Yet, it is important to remember that this does not mean a church cannot participate in these activities, only that these activities cannot be a “substantial” part of its activity spectrum.

According to Publication 1828, activities that would not be considered attempts to influence legislation include conducting nonpartisan educational meetings, preparing and distributing nonpartisan educational materials, or the consideration of public policy issues in a nonpartisan educational manner. We can recognize the key theme here being both nonpartisan (neutral) and educational.

The issue is not whether or not the church can participate in influencing legislation. Rather, the issue lies in the size and scope of its participation in legislative influence compared with the church’s activities as a whole. The question thus becomes, “How is legislative activity measured?”

Measuring legislative activity

There are two tests that may be used to determine the substantialness of an organization’s attempt to influence legislation in relation to its overall activities: the substantial part test and the expenditure test. Unfortunately, churches are not eligible to participate in the expenditure test. (All other tax-exempt organizations may elect to use either test.)

Through the substantial test, a church’s attempt to influence legislation in relation to its overall activities is determined “substantial” on the basis of all pertinent facts and circumstances in each case. The IRS considers a variety of factors, including the time devoted (by both compensated and volunteer workers) and the expenditures (finances) devoted by the organization to the activity, when determining whether the lobbying activity is substantial.

Thus, it is important to be clear that it is not that a church cannot participate in legislative activities, rather, those activities cannot be “substantial” in relation to its overall activities and/or purpose. If your church chooses to participate in legislative activities, you will want to first determine the time and resources that will be required of the church, in order to help determine the substantialness of the activity.

Political campaign activities

According to the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating, or intervening, in any political campaign on behalf of, or in opposition to, any candidate for elective public office. Financial contributions to political campaign funds and public statements, verbal or written, whether made in favor of or opposition to any candidate on behalf of the organization, are also in violation of this prohibition.

We must understand that the key here is that the tax-exempt organizations cannot do anything to favor one candidate over another in any way. IRS Publication 1828 is quick to acknowledge that the “political campaign activity prohibition is not intended to restrict free expression on political matters by leaders of church or religious organizations speaking for themselves, as individuals.”

However, for the church to remain tax-exempt under IRC section 501(c)(3), “religious leaders cannot make partisan (biased) comments in official organization publications or at official church functions.”

Because the political process of choosing our country’s leaders is such an important aspect to the future of our country, it is necessary for the church to play a role in that process. Although the role a church can play is limited, it is important nonetheless. Let us look at some common ways the church can operate in this manner and remain compliant with the IRS.

1. Political speech and endorsing a candidate

As just mentioned, religious leaders cannot make biased comments in official church publications or at official church functions. If you choose to speak or write in an individual capacity, it is imperative that you clearly indicate that your comments are personal and not intended to represent the views of the church. In essence, as an individual, you are guaranteed your First Amendment right to voice your opinion. However, it is when you voice your opinion on behalf of the church that the tax-exempt status may be jeopardized.

2. Inviting a political candidate to speak

Many churches invite political candidates to address the congregation during a worship service. In some instances the candidate is a member of the church. In other cases, the candidate contacts the senior pastor and asks for permission to address the congregation.

When a political candidate is invited to speak at a church or religious event as a candidate, it is important to keep in mind a few general rules in order to avoid political campaign intervention.

  • If the church extends an invitation to speak to one political candidate, it must also extend and invitation to the other candidates running for the same office.
  • The church cannot indicate any support for or opposition to the candidate.
  • Under no circumstances, whatsoever, should there occur any political fundraising.
  • At all times, the church must maintain a nonpartisan atmosphere on the premises or at the event where the candidate is present.
  • The church must clearly indicate the capacity in which the candidate is appearing, and not make any mention of the individual’s political candidacy or the upcoming election in the communications announcing the candidate’s attendance at the event.

3. Hosting political events

If you decide to invite several candidates to speak at a forum, there are several general rules to keep in mind in order to avoid political campaign intervention.

  • The questions for the candidates should be prepared and presented by an independent nonpartisan panel.
  • The topics discussed by the candidates should cover a broad range of issues that the candidates would address if elected to the desired office and which are of interest to the public.
  • Each candidate should be given an equal opportunity to present his or her views on issues discussed.
  • Candidates should not be asked whether or not they agree or disagree with positions, agendas, platforms, or statements of the organization.
  • The moderator should not comment on the questions or otherwise imply approval or disapproval of the candidates.

4.Voter education guides

During election years, many churches choose to distribute voter guides. These voter guides generally provide information on how all candidates stand with various issues. If your churches chooses to issue voter guides during an election year, you will want to keep in mind a few basic rules that will help you avoid political campaign intervention.

  • Do not compare the candidates’ positions on political topics to that of the church’s.
  • Include a broad range of issues that the candidates would address if elected to political office.
  • The description of the political issues should be neutral.
  • All candidates (and their views) running for a particular office should be included.
  • The descriptions of a candidate’s position should either be his or her own words in response to questions, or a neutral, unbiased and complete compilation of all candidates’ positions.

Now, let us go back and look at the conclusion of the court case that we began with in this post.

Branch Ministries v. Rossotti

After being notified of the tax inquiry, the church denied that it had engaged in any prohibited political activity and declined to provide the IRS with certain information the IRS had requested. On February 11, 1993, the IRS informed the church that it was beginning a church tax examination.

Following two unproductive meetings between the parties, the IRS revoked the Branch Ministries’ tax-exempt status on January 19, 1995, citing the newspaper advertisements as prohibited intervention in a political campaign. (You can click here to read more on the opinion of the appeals court.)

Why, I believe, the IRS is relatively silent

Although churches are absolutely prohibited from intervening in political activities under section 501(c)(3) of the Internal Revenue Code, only one church and a handful of religious organizations that were not churches have lost their tax-exempt status due to their participation.

Even though there exist numerous flagrant violations involving churches and political activities, the IRS, in general, has chosen not to enforce the ban on political activities by churches. One may ask, “Why?” Why has the IRS refrained from enforcing this limitation? After careful consideration, there are several possible explanations, which include:

  • The IRS wants to stay clear of any constitutional disputes involving the church and state that would unleash a fury of opposition.
  • The exact meaning of the limitation is uncertain. For example, what is the meaning of “substantial”? How is one able to measure the substantiality of another’s political participation?
  • Violation of this prohibition is largely dependent upon facts and circumstances of the church in question.

Although the IRS has been reluctant to enforce this limitation, it is best practice to familiarize yourself with these limitations and prohibitions so that your church may steer clear of jeopardizing its tax-exempt status.

Conclusion

I want it to be clear that I firmly believe in our constitutional right of free speech under the First Amendment. I also believe that the church needs to be heard more now than ever before in the history of this great nation. Although limitations on the political involvement of churches have been imposed, it is important for churches to learn the parameters in which they can still effectively participate.

As I have said a thousand times at our conferences and as I will say again now, it is imperative for the Church to heed the words of Jesus and “be wise as serpents, and innocent as doves.”

Please feel free to comment. We always appreciate good dialogue. However, we do moderate each comment to ensure that it is on topic and not derogatory to other participants. We ask that you keep your comments brief and pertinent to the topic so that others may benefit.

Blessings,
Raul Rivera


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