Response by Tax-Exempt Organization Scholars to Request for Information

Abstract

A group of academics who study and write about tax-exempt organizations, including their politically related activities, has responded to an August 14, 2023 Request for Information (RFI) from the Ways and Means Committee regarding issues in connection with the advocacy activities of tax-exempt organizations. The submission describes aspects of current law and provides an appendix with a list of the authors’ relevant scholarly work. As a preliminary matter, the submission emphasizes the importance of the voice of tax-exempt organizations to a well-functioning civil society and democracy. The submission also notes that in no case do the laws applicable to tax-exempt organizations forbid all political activity, a term almost without boundaries if “political” means related to government.

Responding to concerns raised in the RFI, the submission makes several points. First, it is appropriate and lawful for section 501(c)(3) organizations to engage in nonpartisan voter education, registration, and get-out-the-vote activities. Second, Congress should lift the restriction that prevents the IRS from issuing guidance regarding the political activities of 501(c)(4) organizations. Third, Congress should take steps to tighten disclosure relating to foreign donors. Fourth, a new study of 501(c)(3) campaign activities is needed. Fifth and finally, affiliated relationships among tax-exempt organizations are standard practice for nonprofits that want to engage in different types and amounts of politically related activity.

Keywords: tax, nonprofit, politics, First Amendment

JEL Classification: K34, L38