Last November the IRS issued a proposal regarding changes to the political activities of 501(c)(4) nonprofit organizations. The initial proposal was ultimately withdrawn this year after receiving more than 160,000 public comments, including input from Nonprofit VOTE and its partners. Nonprofit VOTE’s comments made Adler & Colvin’s List of Top 25 Comments.

Nonprofit VOTE was concerned that in its initial attempt to create a clear definition of political activities for 501(c)(4)s, the IRS proposal wrongly re-classified even nonpartisan voter engagement activities–like voter registration, get-out-the-vote, voter guides, and candidate forums–as partisan campaign intervention. Nonprofit VOTE urged the IRS:

  1. Not to create two definitions of nonpartisanship – one for 501(c)(4)s and another for 501(c)(3)s. This would not only be extraordinarily confusing, but would chill the nonpartisan civic engagement work of charities and nonprofits of every type.
  2. To apply the same definition of partisan or nonpartisan political activity to all 501(c) exempt organizations, including business associations and labor unions established primarily for a civic purpose. Solely targeting 501(c)(4)s is not a solution.

At the Independent Sector Public Policy Action Institute last month, there was a panel on developing a 501(c)(4) organization affiliated with a 501(c)(3) organization. Many 501(c)(3) nonprofits have historically established a related 501(c)(4) organization to conduct advocacy to enhance their mission and work. However, in recent years, 501(c)(4)s have been used to funnel large amounts of secret, undisclosed money into political campaigns. During the Independent Sector session, Greg Colvin and the Bright Lines Project sent proposed regulations to the Treasury to help define political intervention for 501(c)(4) social welfare groups, which was welcomed by many in the nonprofit sector

Materials from the Institute’s session on 501(c)(4)s and public policy are available online. The IRS is expected to release a new draft of the regulations in 2015 at which time the public will once again be able to weigh in with comments.

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