Permissible and Impermissible Political Activity by Houses of Worship - 2004 Information Letter

June 16, 2011

8 min read

Dear Concerned Pastor:

Many churches and other houses of worship recently received a letter dated February 21, 2000 from the "Project Freedom of Religion," regarding "permissible and impermissiable [sic] political activity by houses of worship." Enclosed with that letter were two other documents: a February 2000 letter from the Americans United for Separation of Church and State, and a memorandum authored by two former government lawyers discussing the implications of a recent court decision, Federal Election Commission v. Christian Coalition, 52 F. Supp. 2d 45 (D.D.C. 1999) ("FEC"). The central message of these three documents is straightforward censorship: "Dont distribute Christian Coalition voter guides through your house of worship."

The letter is part of a much larger scheme to silence religious persons who would otherwise speak out on crucial moral issues that are inextricably intertwined with campaigns and legislative initiatives. Just two years ago, the Americans United for Separation of Church and State mailed out 80,000 similar letters, and mounted a similar effort in 1996. See Erik J. Ablin, The Price of Not Rendering to Caesar: Restrictions on Church Participation in Political Campaigns, 13 Notre Dame J. L. Ethics & Pub. Poly 541, 557 (1999).

Most of the issues raised in the Project Freedom materials are already rebutted by the extensive analysis of tax and constitutional law in our "Churches and the IRS" letter, which is available on the Internet at . In the following pages we respond more specifically to some of the issues raised by the "Project Freedom" letter.

Legal Analysis

There are two broad areas of concern regarding the effect of political activity by churches that hold tax exempt status under Internal Revenue Code ("IRC") 501(c)(3). First, the IRC prohibits churches from participating or intervening in the political campaign of a candidate for public office. Second, the IRC permits churches to influence legislation, so long as they do not commit a "substantial part" of their efforts to such activities. Nothing within the "Project Freedom" letter demonstrates that distributing voter guides would violate the first prohibition, or that efforts to influence legislation or a ballot proposition would necessarily comprise a "substantial part" of church activities.

I. DISTRIBUTING CHRISTIAN COALITION VOTER GUIDES WOULD NOT VIOLATE IRS GUIDELINES.

The "Project Freedom" letter discussed the first IRC prohibition, but the accompanying legal memorandum misleadingly analyzed a recent court decision in which the government alleged that the Christian Coalition had violated the Federal Election Campaign Act ("FECA"), not the tax code.

See FEC, 52 F. Supp. 2d 45 (D.D.C. 1999). Although that case is persuasive support for the neutrality of Christian Coalition voter guides because the court did not find the guides to be "express advocacy" under FECA, the controlling legal standard for evaluating the effects of voter guide distribution on tax exempt churches is found in IRS regulations and the judicial interpretation thereof, not in FECA.

Under IRS regulations, churches may distribute a voter guide which includes all viable candidates for an office, within certain guidelines which must be strictly followed. Briefly, the guidelines require that the voter guide must be neutral and unbiased in its statement of candidates and must include candidates positions on a broad range of issues. A voter guide cannot endorse candidates or direct individuals to vote for or against a candidate. Also, the voter guide or scorecard must not contain editorial comments about any political party aimed at inducing voters in a particular way. This includes grading the candidate on his or her stands on the issues of the day. Specifically:

(1) The voting records of all incumbent members of the legislative body who represent the region where the exempt organization works should be included and fairly described;

(2) the voting report should not identify legislators as candidates for re-election;

(3) no comment should be made on an individuals overall qualifications for office;

(4) no statements should be expressly or impliedly made endorsing or rejecting any incumbent as a candidate for public office;

(5) the voting report should not be linked to any election campaign, i.e., by widely distributing the voting report on the eve of an election; and

(6) the voting report should cover a broad range of issues and not target issues that track the organizations known "agenda."

IRS Revenue Rulings 78-248; 80-282.

The voter guides provided by the Christian Coalition in 1999-2000 fully satisfy all of these criteria. Therefore a church should not run afoul of the IRCs candidate campaign ban when it distributes the guides.

II. CHURCHES MAY INFLUENCE LEGISLATIVE PROPOSALS.

The "Project Freedom" letter did not discuss the interaction of tax exempt churches with legislative proposals, but a few church leaders have expressed concern that they may lose their tax exemption if they speak out on legislative issues. This is particularly important in California, where some churches have been asked to distribute flyers supporting Proposition 22.

Proposition 22 concerns a "defense of marriage" act that simply states "[o]nly marriage between a man and a woman is valid or recognized in California." That short statement reflects two centuries of American legislation and jurisprudence, and several thousand years of Judeo-Christian theology. California churches are keenly interested in this ballot initiative that implicates myriad religious doctrines and values, and rightfully so.

The courts understand such interest by religious persons, and recognize that religion is not confined to purely private practices within the cloisters of a church:

Religion includes a way of life as well as beliefs upon the nature of the world and the admonitions to be "Doers of the word and not hearers only" (James 1:22) and "Go ye therefore, and teach all nations, . . ." (Matthew 28:19) are as old as the Christian Church. The step from acceptance by the believer to his seeking to influence others in the same direction is a perfectly natural one, and is found in countless religious groups.

Girard Trust Co. v. Commr, 122 F.2d 108, 110 (3d Cir. 1941) (emphasis added; omission in original). As the Supreme Court put it:

Adherents of particular faiths and individual churches frequently take strong positions on public issues including, . . . vigorous advocacy of legal or constitutional positions. Of course, churches as much as secular bodies, and private citizens have that [constitutional] right.

Walz v. Tax Commn, 397 U.S. 664, 670 (1969).

Fortunately, churches may express their position on Proposition 22 without risking their tax exempt status, so long as they do not devote a "substantial part" of their organizational efforts to such ends. In relevant part, the IRC limits the tax exemption available under S 501(c)(3) to those organizations which are

organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes . . . no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

I.R.C. 501(c)(3)

The determination of whether a specific activity of an exempt organization is "substantial" is essentially a question of facts and circumstances, Kentucky Bar Foundation, Inc. v. Commr, 78 T.C. 971 (1982), and courts have taken different approaches to the matter. For example, in Seasongood v. Commissioner, 227 F.2d 907 (6th Cir. 1955), the court established a five percent (5%) safe harbor rule based on total expenditures applied to legislative activities. Id. at 912. More recently, the decision in World Family Corp. v. Commissioner, 81 T.C. 958 (1983), raised that bar when the Tax Court ruled that an exempt organizations lobbying activities which were less than ten percent, but more than five percent of its total efforts, were "insubstantial."

It should be noted that one court relied on a balancing test, rather than a percentage of expenditures, in determining that a tax exempt religious organization had devoted a "substantial part" of its resources to influencing legislation. See Christian Echoes Natl Ministry, Inc. v. U.S., 470 F.2d 849 (10th Cir. 1972). Instead, this court observed that the percentage test obscured the "complexity of balancing the organizations activities in relation to its objectives and circumstances." Id. at 855.

The Christian Echoes court stated that "the political [activities of charity] must be balanced in the context of the objectives and circumstances of the organization to determine whether a substantial part of its objectives [not just expenditures] was to influence or attempt to influence legislation." Id.

However, the lobbying activities undertaken by the Christian Echoes ministry were most extensive. For example, the organization "attempted to mold public opinion in civil rights legislation, medicare, the Postage Revision Act of 1967, the Honest Election Law of 1967, the Nuclear Test Ban Treaty, the Panama Canal Treaty, firearms control legislation, and the Outer Space Treaty." Id. Furthermore, the organization urged its supporters to take no less than 22 different actions to influence American and international politics, including urging congressional representatives to support or oppose specific bills, abolish the federal income tax, withdraw from the United Nations, and so on. Id.

Under these facts and othersincluding intervention by the defendants in political campaignsthe Christian Echoes court found that the defendant organization had devoted a "substantial part" of its resources to lobbying and affirmed the revocation of its tax exempt status. Id. at 858. Thus, unless a church has a history of engaging in the type of lobbying efforts exemplified by the Christian Echoes case, it is most unlikely that simply distributing flyers that support Proposition 22 or other legislative initiatives would violate either the percentage or balancing tests defining "substantial."

Conclusion

The "Project Freedom" letter is one more mean-spirited effort to suppress the religious speech of pastors and churches whenever that speech does not conform to the standards of the Americans United for Separation of Church and State and similar organizations. This attempt to censor the public expression of private faith will succeed only if religious leaders take counsel of their fears, don the muzzle, and stand mute when moral issues are publicly discussed.

The good news is that church leaders need not yield to fear or respond to such threats with silence. Rather, they can and should clearly articulate their understanding of the moral issues, and freely participate in the political processes within the limits set forth by our laws.

This material is brief overview of a complex area of the law. If you have other questions, please feel free to contact the ACLJ.

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