Compliance with Federal Tax Law

The IRS also has strict regulations for nonprofits participating in political lobbying and campaign activities. In order to ensure that individuals cannot take advantage of tax exempt status, these regulations have been put in place and must be adhered to in order to retain your 501(c)(3 tax exempt status.

During an election year, nonprofit organizations are severely limited concerning participation in political campaigns. In fact, corporations granted tax exemption as nonprofits are completely prohibited from either indirectly or directly acting on behalf of a candidate running for public office. However, certain non-partisan activities may be allowed, depending on the circumstances. Examples include: 

• Non-partisan voter educational programs and publications
• Non-partisan voter registration and "get out the vote" drives

Any evidence of bias concerning an election or lobbying effort may jeopardize a nonprofit's standing with the IRS. 

FAQ: Federal Regulations for Lobbying & Political Campaigns

Can a 501(c)(3) nonprofit participate in political campaigns?
No, 501(c)(3) nonprofits are strictly prohibited from directly or indirectly supporting or opposing any candidate for public office.

What political activities are allowed for 501(c)(3) organizations?
Nonprofits may engage in non-partisan activities such as voter education programs, voter registration drives, and "get out the vote" efforts, as long as these efforts are unbiased.

What happens if a nonprofit violates IRS political activity regulations?
Violating these regulations can result in the loss of tax-exempt status, fines, or other penalties imposed by the IRS.

What is considered lobbying for a nonprofit?
Lobbying refers to activities that aim to influence legislation. Nonprofits can engage in limited lobbying efforts, but must ensure it is not a substantial part of their activities.

How can a nonprofit ensure compliance with IRS rules on political campaigns?
Nonprofits should establish clear internal policies, avoid any appearance of bias in political matters, and seek legal advice to stay in compliance with IRS regulations.

If you are concerned about maintaining compliance with federal tax requirements governing your nonprofit organization, contact our firm by calling (214) 865-7542 today and speak with an attorney in a free consultation.