IRS Commissioner Attacks Charities

In a February 24 speech at the City Club of Cleveland, IRS Commissioner Mark Everson criticized charities that became involved in politics. The appropriate excerpts from his speech:

Nearly three-quarters of the 82 examinations completed to date have substantiated that the charities or churches engaged in prohibited political activity. Most of these exams concerned one-time, isolated occurrences of prohibited campaign activity, which the IRS addressed through written advisories to the organizations. In three cases — involving charities but not churches — the prohibited activity was egregious enough to warrant the IRS proposing the revocation of the organizations’ tax-exempt status.

Some of the specific instances of political intervention alleged and examined include the following:

• • Charities, including churches, distributing diverse printed materials that encouraged their members to vote for a particular candidate (24 alleged; 9 determined),
• Religious leaders using the pulpit to endorse or oppose a particular candidate (19 alleged; 12 determined),
• Charities, including churches, endorsing or opposing a candidate on their website or through links to another website (15 alleged; 7 determined),
• Charities, including churches, disseminating improper voter guides or candidate ratings that encourage readers to vote for particular candidates (14 alleged; 4 determined),
• Charities, including churches, placing signs on their property that show they support a particular candidate (12 alleged; 9 determined),
• Charities, including churches, giving improperly preferential treatment to certain candidates by permitting them to speak at functions (11 alleged; 9 determined), and
• Charities, including churches, making cash contributions to a candidate’s political campaign (7 alleged; 5 determined).

So what are we going to do next? As we head into the 2006 campaign season, the IRS will:
Distribute expanded educational materials based on findings in the 2004 cycle, making them widely available early in the coming election cycle,

1. Start our enforcement efforts earlier in the election year to ensure consistent and timely referral selections and examinations,
2. Publicize our efforts in advance so there is no surprise to organizations, and
3. Augment the dedicated and trained team working on political intervention to assure prompt handling of project cases.

posted by Consumer Help Web Editorial Team at 10:49 AM |