1988 Issue 6 - Preachers and Politics: What Does the IRS Allow? - Counsel of Chalcedon

8/12/2019 1988 Issue 6 - Preachers and Politics: What Does the IRS Allow? - Counsel of Chalcedon

1/4

PRE-ACHERS AND POLITICS: WHAT

DOES THE IRS ALLOW?

Preaching

on

politics is

as

American

as

apple

pie

. The Father of the Ameri

can

Revolution, Samuel Adams, used

to call the New England clergy his

black regiment because he could

count

on them

to proclaim

the

message

of liberty and independence from the

pulpits across the land. Early American

clergymen commonly preached electric

sermons

near election day to remind

their parishioners

of

heir civic responsi

bilities and to present a Biblical view of

political affairs.

The

-French observer,

Alexis de Tocqueville, wrote that while

religion in America takes no direct part

in government, it must be regarded as

the first

of

their political institutions.

This is

not

surprising. God's Word

has a lot

to

say about abortion, crime

and punishment, economics, national de

fense, foreign policy, and almost every

other issue one can imagine.The preach

er who fails to presen t the biblical view

point

on

these matters is

not

preaching

the whole counsel of God.

For

civil

government is, as Paul tells us in Ro-

mans 13, ordained by God.

In

all his

John Eidsmoe

received a law

degree from the

Umversity of

Iowa. He also

hqlds a J)olitical

scteoce e g ~

a M.

Div.,

a

M:A

.

in Bibliccil. Studies, and a

Doctor

of

in-

istries. From 1981-86 he taught constitu

tional law and legal history at O.W. Co-

bum School of Ulw. He currently teaches

Systematic Theology and law

n

govern

ment at Tulsa Semmary of Biblical

Lan-

g u a g ~ s ~ po,P_ular lecturer

on

legal

constitutionaftssues, he

has

also wntten

several books, including

The

Christian

Legal

Advisor;

od

anii Caesar and

Cllristianity

nd

the

Constitution.

y

John

Eidsmoe

voluminous works, Martin Luther

wrote more about civil government

than any .other subject except justifica

tion by faith. For this reason,

if

the

United States Government were to pro

hibit pastors from preaching on

politi

cal issues or churches from engaging in

political activity,

it would not

only

violate the Fi rst Amendment guarantee

of

free speech; it would also, in my

opinion, violate the First Amendment

guarantee of free exercise of religion.

For

while the religious beliefs

of

some

pastors

do

not compel them to speak

out on political issues, the religious be

liefs of others do.

Our

government has

not

prohibited

churches from engaging in political acti

vity.

But

through the ffi.S,

it

has done

something similar: It has required

. churches to curtail sharply their politi

cal activity or lose their 501(c}(3) tax

exempt status. While this is

not

an out

right prohibition

on

political activity,

the effect is similar.

For

as the U.S.

Supreme Court noted in

McCulloch v.

Maryland 17

U.S.

4 Wheat)

316

(1819), The Power to tax involves the

power to destroy. nd as the Supreme

Court also noted in

United States v.

Butler 297 U.S. 1 (1936), the power

to confer or withhold unlimited benefits

is the power to coerce

or

destroy.

.

My

position, then, is that the current

restrictions on political activity by reli

gious organizations are an unconstitu

tional infringement

on

religious free

dom. I hope they will be

changed.

But

the

main

purpose

of

this article is not

to argue what the law should be, but to

explain what the law is

-

so that pas

tors and church workers can be informed

and

act accordingly to preserve their tax

exempt status,

i f

they are so inclined.

Let us begin

by

noting that merely

incorporating

as

a non-profit corpora

tion under the laws

of

your state does

not automatically make you a tax ex

empt

organization

in

the eyes

of

the

IRS

To

obtain

tax

exempt status, most

organizations must file for such status

under Section 50l(c)(3) of the IRS

code. Many

are

unaware, however, that

churches need not file under Sec.

501(c)(3); a chtrrch has such status auto

matically simply by being a church un

less the IRS revokes such tax exempt

status for various code violations.

Generally speaking though, churches

are

tax

exempt organizations under

501(c)(3)

of

the Internal Revenue Code.

This means they do not have to pay tax

es on their income, and persons who do

nate to such churches can deduct their

contributions from their taxable in

come.

But

in order to obtain and retain

-heir tax exempt status, the Internal

Revenue Code requires that churches

and o ther organizations must be organ

ized

and operated exclusively for reli

gious, charitable, scientific, testing for

public safety, or educational purpos

es ..... In keeping with this require

ment, the Code limits political activity

in

two ways: (1) No substantial part

of

the activities

of

which

is

carrying on

propaganda, or otherwise attempting,

to

influence legislation; and, (2) the or

ganization must not participate in

or

intervene in (including the publishing

or

distributing

of

statements}, any

po-

litical campaign on behalf of any can

didate for public office.

You'l l notice two categories ofpoliti

cal activity:

1

Attempting to influence

legislation. This is allowed to some de

gree; the Code simply says

no

sub

stantial part

of

the organization's

activi.:.

ties may be directed to influencing legis-

Page 10

: T h e

Counsel of Chalcedon, June, 1988


2/4

lation. (But what is substantial ? -

Good question. We'll discuss that lat

er.) And, (2) Participating in campaigns

for public office. There is no substan

tiality test here; this is prohibited entire

ly.

Let's discuss each of these categories

separately:

l n f l u e n c i n ~

e ~ i s l a t i o n

s we have seen no substantial part

of the church's activities may be direct

ed

toward influencing legislation.

But

several questions arise: (a) What is legis

lation?

(b)

What constitutes influencing

legislation? (c) What is substantial?

(a) Legislation consists of laws pas

sed

by a legislative body, whether it is

Congress, your state legislature,

or

a lo

cal county commission

or

city council.

It does not include action by an adminis

trative body such

as

school board or

zoning commission. Nor does it nor

mally include action by an executive;

for example, a letter

to

the President

urging him to follow a certain course

of

action such as bombing Libya is not in

fluencing legislation.

If

however, the

President

is

preparing legislation

to

pre

sent to Congress, communications with

his staff concerning that proposed legis

lation might constitute influencing le

gislation.

Urging the courts to tllke action nor-

mally does not constitute influencing

legislation. Also, you are not influenc

ing legislation i f you simply urge that

existing laws

be

enforced; for example,

a letter to the mayor or police chief urg

ing that existing laws be used to crack

down on pornography, is not influenc

ing legislation. See IRS r13 Reg.

1.501(c)(3)-l(c)(3)(ii); IRS Reg.

53.4945-(2)(a)(2); IRS Reg. 53.4945-

2(a)(2); Rev. Rul. 73-440, 1973-2 C.B.

177; Rev. Rul. 67-293, 1967-2 C.B.

185.

(b) What is influencing legislation?

The IRS considers direct lobbying to

be influencing legislation. Direct lobby

ing consists

of

communications with

members

or

employees

of

legislative

bodies or government officials who

may participate in the formulation of

legislation, which pertains to legisla

tion being considered by a legislative

body and reflects a view with respect

to

the desirability

of

the legislation. See

IRS Reg. 1.501(c)(3)l(c)(3)(ii).

The IRS also prohibits 501(c)(3) or

ganizations from engaging substantially

in another form of influencing legis

lation called grass roots lobbying,

which consists of urging the public

to

support or oppose legislation. See pro

posed IRS Reg. 56.4911-2(c).

Even if you do

not

expressly urge the

public to contact their legislators, your

expression of opinion concerning the de

sirability or undesirability of legislation

might be considered lobbying.

Activity that primarily seeks to in

form people about an issue

is

not con

sidered as influencing legislation, even

if it involves taking a position

on

the

issue.

As

the Court

of

Claims said in

Haswell v. United States,

500 F.2d

1133 (1974),

Advocacy ofa particular position

or

viewpoint qualifies as non-partisan

analysis, study, or research s long as

there is a sufficiently full and fair ex

position

of

the pertinent facts to enable

the public or an individual to form n

independent opinion or conclusion.

If

you state your opinions in a reason

ably objective manner, presenting both

sides of the issue, your activity is mot;e

likely

to

be

viewed as educational rather

t ~ a T l i.Ttfluencing legislation It is

also

more

likely to be viewed as religious

activity i f

t

is geared toward presenting

what the Bible has to say about a

political issue -- which is what we

should be stressing anyway. However,

we still have to be careful. s the

Tenth Circuit Court of Appeals said in

Christian Echoes National Ministry,

Inc.,

v

United States, 470 F.2d 849

(1972), The fact that specific legisla

tion was not mentioned does not mean

that these attempts to influence public

opinion were

not

attempts to influence

legislation.

The IRS recognizes a technical ad

vice exception.

f

your organization

supplies technical expertise in response

to a request by a governmental body,

this will not constitute influencing

legislation. The request, however, must

come from a governmental body, and

not

simply

from an

individual legis

lator.

For

example, i f Senator Johnson

were

to

ask the Direction

of

the Bill

of

Rights Legal Foundation to testify be

fore the Senate Education Committee as

to the constitutionality of a creation

science bill, that

would

be influencing

legislation.

But if

Senator Johnson

couldget the Senate Education Commit

tee itself to formally make the request,

that would not constitute influencing

legislation. See IRS Code 4911 and

4945(e)(2); IRS Reg. 53.4945-2(d)(2).

This regulation provides that the request

must

be

made in the name of the legis

lative body and not the individual legis

lator, that your response must be avail

able to every member

of

the requesting

legislative body, and

your

opinions and

recommendations

may be

offered only

if

they are specifically requested by the

legislative body.

The IRS also recognizes a self de

fense exception: f egislative action is

proposed which

might

affect the exis

tence of your organization, its powers

and duties, its

tax

exempt status, or de

ductibility of contributions to the organ

ization. For example, suppose you

are

director of The Yellowstone

Park

Mis

sion Society, n organization that holds

religious services

and conducts

witnessing in Yellowstone National

Park. Suppose further,

a

bill is pro-

posed

in

Congress \Vhich \ /Ould pro-

hibit the holding of religious services

or

giving out religious literature in

national parks. Since that bill directly

affects the existence and activities of

your organization, your efforts to defeat

the bill will probably be considered an

exception

to

the prohibition against in

fluencing legislation. The same might

be true of bills to provide for taxation

of church property, etc. See IRC

491l(d)(2)(C); IRC 4945{e); IRS Reg.

53.4945(2)(d)(3 )(i)&(ii).

Section 4911(d)(2)(D) exempts from

the lobbying prohibition certain com

munications between

an

organization

and its members. According

to

Pro

posed IRS Reg. 56.4911-S(b), such

communicationsmust ( 1) be directed on

ly, (2) related to legislation

of

direct in

terest to the organization

and

its mem-

The Cou.nsel of Chalcedon, June, 1988 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Pa ge 11


3/4

bers;

and

(3) not directly encourage the

members to e ~ g a g e in direct

or.

.graSs

roots lobbying. Members are defined

ru

those who pay dues or make more than

nominal conttibutions ("nominal" is

not defined) ot those who are of a limit

ed nwnber or honorary or life members

who have been chosen for valid reasons

such as length of service or involve

ment in organizational activities.

According to IRS Code Section

4945, ex:iiminations and discussions of

broad soCial, economic, and similar is

sues do not constitute influencing legis

lation so long as they do not address

specific legislative proposals, even i

the5e are the ypes of issues legislatures

are likely to address. IRS Reg. 5 3 4 9 4 5 ~

2(d)(4) attempts .to clarify this, but

this

exception is still very vague.

But even

if

yolll' activity does consti

tute "express advocacy" of legislation,

it will not affect your tax exempt status

i f it does not constitute a "substantial

portion" of your organization's total

activity. But what is substantial? Get

ready for a milestone in bureaucratic

doubletalk: IRS Regulation 1.501 (c)

(3) (1) c) provides thatan organization

will lose its tax exempt status i f "more

than an insubstantial part of its

activi-;

ties is not in furtherance of an exempt

purpose." So what is substantial"? The

IRS defines

it as

"more than insubstan

tial" And

I

dare not ask how the

IRS

would define "insubstantial;" the answer

would probably be "less than substan

tial"

The regulation goes on

to

say, h o w ~

ever, that in determining whether or not

the activities are substantial, all the

surrounding facts and circumstances, in

cluding the articles and activities ofthe

organization, are . o-be considered."

It

is tempting . o look to percentages

of total activity as a measure ofsubstan

tiality. The courts have referred to pet"

centages from time .

o

time, but have

never expressly adopted a percentage

rule as an absolute test. For one thing,

we have to ask, percentageofwhat? Per

centage of the total church budget? Per

centage of members

or

staff involved?

Most likely the coUrts would look

at

a

percentage of all these factors taken: o..'

gether

From the case of Seasongood v.

Commissioner

227

F.2d

907

(6th Cir.

1955),

it

appears that i f the church's

ef :

fortS

to influence legislation constitute

less than 5 of its total activity, he

church is quite safe. f efforts to in

fluence legislation constitute between

5

and

20

of

the total activity,

the

case could go either way depending

upon all

of

the facts and circumstances

involved -- and,

to

be quite candid, d e ~

pending updn the inclination and pre

judices of

the IRS agent who 'handles

the case.

f

e(fortS'

to

nfluence legisla

tion constitute more than 20% of the

church's total activity,. the church's tax

exempt statusis in serious. jeopardy.

At the t i m ~ one applies for

tax

ex

empt status,

it

is possible

to

make an

electiOn under 501 (h) of the

IRS COde.

This election effectively places the or

ganization under a special rule whereby

the question of whether your o r g a n i z a ~

tion's legislation-influencing activities

are "substantial" is deterinined by look

ing at the organization's gross expendi

tures. If less than 20 of the expendi

tures are directed toward influencing

legislation, your organization meets the

political test under501(c)(3), provided

all other criteria are met

If you do not make the 501(h) elec

tion, the IRS

uses

a "totality of circwn- .

stances" test for determining whether--or

not your lobbying activity is "substan

tial."

f your organization is already tax ex

empt under 501(c)(3), you can still

make the election for future years,

though, you cannot make it r e t r o ~

actively.

I n f l u e n c ~ n 2 Elections

As we

have

s.een, influencing legisla

tion cannot be a substantial part of your

total activity. Influencing elections, on

the other hand, is forbidden entirely.

What's the ,difference? Simply put,

working

to

defeat a bill

to

establish

school-based clinics in the public

schools is influencing legislation.

Working

to

elect Jack Kemp as Presi

dent

of

the United States is influencing

elections.

Butwhat coristitutesinfluendtig elec

tions?

f

Pat Robertson preaches or is

introduced at your church, that might

constitute influencing elections; but if

your church offers a candidates' forum at ,

which allof the candidates are invited to

appear; that probably is OK. f your

chureh organizes a group

to

go door to

door passing out literature for George

Bush, that is influencing

an

election:

But your church conducts a nonparti

san voter registration drive; that probab

ly is permissible. Obviously, a church

could not give money to a political cam

paign or endorse a

political

candidate.

According to IRS Reg. l . 5 0 1 c ) 3 ) ~

l(c)(iii), the term "candidates for public

office" means an individual

who

offers

himself, or is proposed by others, as a

contestant for an elective public office,

whether such office is national, state or

local." So long

as

the

offtce is elective,

it does not matter whether'ifis partisan

(that is ,

the

candidate runs under a party

label, such as Democrat or Republican)

nor nonpartisan (See Rev. Rul. 67-71,

1967-l C.B. 125). Urging the mayor or

(Continued on page

24)

Two

Important Books

by Dr. John Ejdsmoe

Available free

for

donations

to

h ~ Counsel ofChalcedOn

The Christian

Legal dvisor

Available for a $45.00 donation

Christianity and

the

Constitution

Available for a$55.00 donation

Page 12

---------------------------The

Counsel or Chalcedon, June, 1988'


4/4

The

Westminster Confession

(Continued from page 7)

t ~ of t h o u ~ h t and behaviour. This is

the reason for the collapse of the re

ligious and moral standards which .our

Christian faith represents.

t

is folly

to

think

that we can retain

or

reclaim

Christian culture

on

any lower level

than that which the Westminster Assem

bly defined. Christian thought may

never

be stagnant. When

it

ceases to be

progressive,

it

declines.

But we

do

not

make progress by discarding our heri

tage.

We b1,1ild

upon

it

or, more accur

ately,

we

grow from it. .

Oftentimes

it

is pleaded tha:t the

Christian message must

be

adapted

to

the modem man. It is true that the meS

sage inust be proclaimed to modem

man, and to modem man in the context

in

whi

ch

he

lives and

in

language

he

can understand.

But it is

much more

true and

m p o r ~ t

to plead that modem

man

must

be adapted tothe gospel. It is

not true that the doctrine of the Confes

sion is irrelevant to the modem man. It

is

indeed

meaningless to

him

until

he

listens to

it. But

when a man today

be

comes earnest about the Christian faith,

when he gives heed to Scripture

as

the

Word

of God, when

he

faces

up to

the

challenge of unbelieving ways of

thought

and

life and demands the answer

which Christianity provides,

he

cannot

rest with anything less than the consis

tency and vigour which the Confession

exemplifies. Unbelief is potent and sub

tle, and the believer requires

the

truth of

God in

its fullest expression

i f he is

to

be furnished to faithful witness and con

fession.

[I'his article is taken from Gollected

WrUlnES of John Murrai The Banner

of Trutli. T r u s ~ Edinbl: mh ~ c o t l a n d ,

1976,

Vol. 1:

TM Claims ofTruth chapter

43, pp.

316-322.

I t s

use4

1tere

by permission.)

0

Preachers

and

Politics

(Continued from page 10}

governor to appoint a new police chlef

or judge

would not constitute influenc

ing elections. Tlie same is true

of

urg

ing the selection

of

a Supreme Cotirt

Justice, though

it is

possible that that

might constitute influencing legislation

since the Senate must confirm the noey- .

nation.

It

appears the IRS is tigh,tening up

on candidate surveys.Various organiza

tions, Right and Left, have .surveyed

candidates for public office on how.they

have voted

oi:

would vote

on

key issues

of concern, and ttien distributed the re

sults of the survey to their adherents.

The m s now appears to be saYing that

such surveys constitute influencing elec

tions and could cause a church to lose

its .tax exempt status. Such surveys are

probably pennissible provided the fol

lowing guidelines are followed: (1) On

ly i n c u m b ~ n t

office-holders are sur

veyed, not their opponents; (2) The sur

vey is

not

timed to an election; and

(3)

The published survey does

not

com

ment on the results, indicating A 'yes'

vote on this issue is a good vote, etc.

See

Rev. Rul. 78-248, 1978-1 C.B.

1S4; Rev;Rule. 80-282, 1980-2 C.B .

178; G.C.M. ~ 9 4 4 1 N o v e m ~ r 7,

1985.

Other Observations

The above prohibitions

affect

.

he

church as an organization, notnecessari

ly the individuals involved therein.

While

the board of Christ the Redeemer

Lutheran Church could not endorse a

single candidate for the Presidency, Pas

tor Erickson may do so as an indi

viduaL Whether he may do so from the

pulpit is 'uncertain. Attorney ames

F

Schoener

of

the Wa'shirtgton; D.C. Law

Firm of

enkins, Nyst rom Sterlacci

believes he may do so (Letter from

Schoener to Rev. D. James Kennedy,

Coral Ridge Presbyterian Church, April

17, 1980.) There are, however, indica

tionS that IRS offiCials may now

dis

agree with that position. '

f

the church gives its membership

list

to

a political campaign,

that

might

constitute political activity.

But i f

the

candidate buys the list and i f other can-

.

i d ~ t e s couldalso

buy it, that would

be

Non-Profit Org.

U.S. Postage

PAID

BULK RATE

Permit No.

1553

OK.

On

the other hand,

i f

the

chu.IGh

directory is available to the members, .

then any iridividual member could give

t h ~ directory to the campaign, and that

v,;ould

not

present a problem.

The

church may not give money

to

.a

candidate, and may not give a substan

tial portion

of

its money to lobbying

organizations.

But

there is

no

problem

with. ndi.viduals doing so.

Some

groups find

it

necessary to es

tablish two corporations

-,-

one to con

duct educational, religious, charitable

and other tax exempt activities, and the

other to engage in political activity, n

avowedly political organization might

set up an educational arm that qualifies

for ~ 0 1 c ) 3 )

tax exempt status, and

channel

its tax

exempt. activities and

contributions through that organization;

A

religious organization might set up a

political

arm

that is not

iax

exempt

l>Ut

is

free to engage in political activity.

Your church m,ight consider following

that course of action i f you wish to

direct a substantial portion

of

your

c t i ~

vities

to

.politics.

I

emphasize in closing that the law

in this area is fluid and changing. While

this article does

not

constitute the

giving

of

legal advice and should not be

relied upon

as

.an ironclad statement

of

the law, I hope

it

will be helpful to

those who want to know what they can

do politically without rumting afoul

of

the

m s

.

[This article was p r e p a r ~ d

and

.P.ub

lisbed tolntly bJ Amencan. VISion,

Gary DeMar, President, P.O. Box

72051.?

-t

Atlanta,

Georgia

30328

404-9M-0555,

and

Bill

of Rights

F o u n d a t i o n ~ John E i d s m o ~ Director,

8769

S. b

E. Avenue, Hroken Ar

row, Oklahoma 74012.

t

is used

here

by

permission.]

0

Piige 4 The Counsel of Chalcedon, June, 1988

Documents

1988 Issue 6 - Preachers and Politics: What Does the IRS Allow? - Counsel of Chalcedon