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Advocacy Blog
Friday, April 18, 2008
IRS Discusses Continued use of PACI Program
The Internal Revenue Service (IRS) has announced that its Political Activities Compliance Initiative (PACI) will be in effect for the 2008 election season. "The PACI program seeks to educate section 501(c)(3) organizations such as charities and churches about the federal law concerning political campaign activity and to enforce the law in this area." The IRS press release reports that letters are being sent to the national political party committees, and have asked candidates that their contacts with charitable organizations do not unintentionally put the group's tax-exemption at risk.
The IRS has also posted a program letter to its Exempt Organizations employees from Lois Lerner, the director of exempt organizations. The letter explains the PACI objectives, to provide information on the prohibition on political campaign activity and to "maintain a meaningful enforcement presence in this area."
The letter notes two areas where past experience has proven the need fore more attention; issue advocacy and internet cases. The memo emphasizes that the facts and circumstances test will still be used, for example, "instances involving issue advocacy carried out through single issue pamphlets described as 'voter guides'."
While these single-issue pamphlets do not on their face provide information on specific candidates or elections, that should not end the inquiry. . . . consideration must be given to the context in which it is distributed, and to whether the manner of distribution and other facts and circumstances surrounding the communication tips the scale in one direction or another. Distribution of a communication that on its face appears to satisfy the requirements of a permitted issue advocacy communication may become impermissible campaign intervention if it is accompanied by a statement, or an action, that ties a position articulated in the communication to a particular candidate or election.
The letter warns; "EO must be prepared to face taxpayer challenges, which may lead to court, regarding IRS published positions on issue advocacy, whether the fact patterns involved match the examples provided in the Revenue Ruling or present novel facts and circumstances."
Meanwhile, earlier this week, Roll Call ($$) reported that "[t]ax regulators are hinting at an imminent crackdown of outside political outfits masquerading as nonprofit organizations [. . .] Lerner [. . . ] recently told Roll Call that the agency is taking a 'close look' at allegations involving excessive political activity, particularly by 'social welfare' organizations that register under section 501(c)(4) of the federal tax code."
Posted by Amanda Adams
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