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Can we hold Forum on tax increase?

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Can we hold Forum on tax increase?

Can our 501(c)(3) parent group sponsor a Forum about a school tax increase election? Our school district is sending the superintendent and a Board Member to speak and, of course, they want the vote to pass. Do we have to have someone there to speak on the negative impact? Is this legal for our group to sponsor without putting our exempt status at risk?

This sounds like a good example of the difference between lobbying, i.e. taking a position on pending or identifiable legislation, which charities are permitted to do so long as it is not a substantial part of their activities, and electioneering, i.e. supporting or opposing a candidate for office, which charities may not do without jeopardizing their exempt status.  (See Ready Reference Pages:  “Lobbying Rules Create Opportunity for Charities.” and “IRS Issues New Guidance on Electioneering.”)
It sounds as though the Forum would deal with a public referendum on a school tax increase, which the IRS would consider legislation.  You are not required to be even handed and would not be required to have an opposition speaker unless you want to.  Even if you took a position on the proposal, it would be considered direct lobbying and generally within your rights as an organization.  It would not be endorsing or opposing a specific candidate for election.
As we have said many times, if a charity is not lobbying on the issues that affect its constituents, it probably is not doing its job.

Thursday, October 27, 2011


I don't think the editor answered the actual question that was asked. The editor assumed that the proposed tax was pending legislation. However, the questioner used the word "election" which leads me to believe the question was about a public referendum. For example, the ballot voted on today in my jurisdiction included a referendum on increasing the local sales tax. Thus, support of passage of the referendum would be political activity and would be prohibited conduct by the 501(c)(3) organization. Even so, the organization can host a meeting to inform the public about the referendum and allow officials to provide information. It should refrain from urging people to vote in favor or against. 

I had also assumed that the pending tax was to be approved by public referendum. The Treasury Regulations provide that the term "legislation" for lobbying purposes "includes action by Congress, any state legislature, any local council, or similar legislative body, or by the public in a referendum, ballot initiative, constitutional amendment, or similar procedure."  Reg. Sec. 56.4911-2(d)(1).  Therefore, a charity may take a position on a referendum in the same way it can take a position on other pending legislation.  The referendum does not involve the election of a candidate for public office.

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