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IRS Guidelines on “Political Activity

June 01, 2007

On June 1, 2007, the Internal Revenue Service (“IRS”) released Revenue Ruling 2007-41 (the “Ruling”) that provides additional insight into what activities will be considered “political” activity under the Internal Revenue Code (“Code”). While the examples in the Ruling are focused on activities conducted by section 501(c)(3) organizations and impermissible “political intervention” by charitable and educational organizations, the information is instructive for other tax exempt organizations in determining whether certain activities may be considered “political” or “lobbying” activities.1

For section 501(c)(4) advocacy organizations, section 501(c)(5) labor organizations, section 501(c)(6) trade associations, the Ruling builds on but does not redefine or substantively expand the scope of what communications and activities are considered political. Instead, the Ruling instructs us again that lobbying activity under the Code should focus on public policy and government actions instead of candidates and campaigns.

Organizations that sponsor communications “close in time to [an] election” (a period that continues not to be precisely defined) and consider their communications to be lobbying should be able to demonstrate how the communication:

• is part of an ongoing advocacy campaign and the organization’s broader lobbying efforts;
• is timed to coincide with a non-election event (such as a vote, a hearing or other legislative action); and,
• is not a comparison of two candidates.

The absence of these factors could be used against an organization in a facts and circumstances analysis on whether a certain activity should be considered political or lobbying activity. While non-charitable organizations are not prohibited from engaging in political activity, this distinction between lobbying and political activity is important for tax exempt organizations in determining whether: 1) the organization’s primary purpose is political, and 2) the organization needs to report the cost of such activity to the IRS on Form 990 and pay any tax due under Code section 527(f).

In the Ruling, the IRS reiterates its view that “[e]ven if a statement does not expressly tell an audience to vote for or against a specific candidate” a communication may be considered political if it is a message “favoring or opposing a candidate.” The IRS, that is, continues not to follow a Buckley magic words express advocacy standard. Instead, whether a communication is political will depend on “all the facts and circumstances.”

Building on its earlier guidance in this area, the key factors the IRS will consider in its analysis include:

  • whether the statement identifies one or more candidates for a given public office;
  • whether the statement expresses approval or disapproval for one or more candidates’ positions and/or actions;
  • whether the statement is delivered close in time to the election;
  • whether the statement makes reference to voting or an election;
  • whether the issue addressed in the communication has been raised as an issue distinguishing candidates for a given office;
  • whether the communication is part of an ongoing series of communications by the organization on the same issue that are made independent of the timing of any election; and,
  • whether the timing of the communication and identification of the candidate are related to a non-electoral event such as a scheduled vote on specific legislation by an officeholder who also happens to be a candidate for public office.

A full copy of the Ruling is enclosed and available at:

As always, please let us know if you have any questions on this latest development with the IRS or would like to discuss its application to any particular activities or organizations.

1 If you are interested in our analysis for section 501(c)(3) organizations, let us know. We are preparing a document specifically for charitable and educational organizations. This brief memorandum is intended for advocacy organizations and other non-charitable organizations that engage in issue advocacy and similar grassroots lobbying activities.

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