Randolph Law Firm, P.C.

IRS approves tax-free status for church that is apolitical

Charitable organizations in Nevada are generally exempt from paying a corporation tax to the federal government. Churches are charitable organizations and generally they enjoy tax-free status pursuant to IRS regulations. However, the involvement of a church or other charitable organization in promoting political agendas for other entities is a violation of the Internal Revenue Code and will expose the church to losing its tax-free status.

The conflicting interplay of these rules has stirred controversy throughout the country and has sometimes impacted on campaign results in state and federal elections. A church cannot intervene in an election campaign in order to support one of the candidates. On the other hand, a minister may recommend a candidate on a personal level that is strictly not associated with any church activities or functions.

Where a church placed ads on behalf of a particular candidate or in opposition to a candidate whose positions violated "biblical precepts," that would be going too far and typically result in the church losing its tax-exempt status.  Due to precepts of the separation of church and state, the enforcement of these concepts is relatively consistent and strong. However, the IRS will not necessarily go out of its way to enforce the ban if it does not receive a complaint that initiates an investigative process.

It therefore appears that where the individual is concerned, there may be a right to comment and partake to a significant degree in political activities. That policy reflects free speech principles and other considerations of basic personal liberties. Where the individual, however, ventures to associate his religious institution as part and parcel of his "personal" political activities, the separation of church and state has been offended and the magic line has been crossed. These tenets of federal law apply in Nevada as well as every other state, and they tend to guide the IRS in the form of broad principles of enforcement.

Source: thehill.com, "The IRS restrictions on the clergy's speech", Anthony P. Ashton, May 22, 2015

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