59 Groups Violated Rules on Electioneering in 2004, IRS Says

Nearly three-quarters of the 82 religious and charitable organizations that the Internal Revenue Service has investigated over allegations of illegal political activity during the 2004 election cycle have been found guilty of violating the law, the revenue service has announced.

In most of the cases, a charity or religious group made only a single foray into partisan politics, the IRS said in a report. But three organizations made so many missteps that the tax agency has recommended that their tax-exempt status be revoked. As is its policy, the revenue service did not identify any of the groups involved.

Under federal law, religious congregations and charities are prohibited from participating in partisan political campaigns in support of, or in opposition to, candidates for public office.

The violations represent a “disturbing amount” of improper involvement in the 2004 elections, even though the vast majority of charities and religious groups did not break election and campaign laws, IRS Commissioner Mark W. Everson said.

“We can’t afford to have our religious and charitable institutions undermined by politics,” Mr. Everson said.

Of the 82 groups examined by the IRS, 59 nonprofit organizations illegally participated in political campaigns, including 37 religious congregations and 22 charities. Another five groups committed tax violations unrelated to politics. Eighteen groups were cleared of any wrongdoing.

The revenue service sent written warnings to 55 of the organizations that violated the law, and forced one group to pay a penalty. The IRS said an additional 28 groups are still under investigation.

Common Trouble Spots

Among the most common violations, religious leaders 12 times used the pulpit to endorse or oppose a candidate for office, the tax agency said. In nine cases, charities and religious organizations distributed voter-education materials designed to sway people in favor of a particular candidate. Nine groups showed preferential treatment of particular candidates by letting them speak at one or more functions. Five made improper cash contributions to a candidate’s political campaign.

The IRS said the cases “stretched across the political spectrum” and were not associated with just Republicans or Democrats.

The revenue service set up a special audit process in 2004 to determine quickly whether charities and religous groups were getting involved in political campaigns, with the goal of stopping illegal activity before it could affect an entire campaign season.

The audits drew criticism from some organizations and members of Congress, who questioned whether they were being used to stifle disagreement with President Bush, who was running for re-election (The Chronicle, November 11, 2004).

A report by the Treasury Department found no evidence of political bias in the tax agency’s investigations, but said the IRS created a false per-ception that the investigations were politically motivated by beginning them months before Election Day.

The IRS said it will use the special audit process again for this fall’s elections. It also released detailed guidelines for charities about how to comply with the prohibitions on political activities.

Copies of the guidelines can be found at http://www.irs.gov/pub/irs-tege/paci_procedures-feb_22_2006.pdf.pdf.

Copies of the report are available at http://www.irs.gov/charities/article/0,,id=154622,00.html.