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It’s hard to turn on a TV, read the news, or walk into a social setting without hearing about the election. As we head into the full-blown campaign season, we want to remind you that federal tax law specifically prohibits political campaign activity by employers that are tax exempt under Code Section 501(c)(3).

If you are a tax exempt 501(c)(3) employer, listen up…A violation of any of these prohibitions could lead to tax penalties and may constitute grounds for revocation of your tax-exempt status.  Even minor violations may lead to an IRS audit, which can be burdensome and expensive.  We recommend that you take steps to ensure that your employees’ activities do not cause your organization to cross the tax-exempt line.

So what constitutes campaign activity?

Federal tax law prohibits participating, directly or indirectly, in any political campaign activity supporting or opposing any candidate for any public office (federal, state or local). Political campaign activity includes fundraising, making contributions, or making written or oral statements in support of or in opposition to a candidate. Federal tax law similarly prohibits lobbying, which generally is defined as attempting to influence legislation at any level (federal, state or local). The prohibitions on political campaign and lobbying activities also include supporting or opposing public referenda, ballot initiatives or proposed constitutional amendments.

While employees are free to pursue political activities as individuals, it’s important that they get the message that they may not use the employer’s resources, and must make certain their activities are not attributed to the employer. Below are rules that should be stressed to your employees and abided by strictly:

  • Do not use office space, facilities, staff, equipment or resources of any kind (including email, computers, phones, iPads, mailing or donor lists, etc.) in connection with personal political campaign or lobbying activities.
  • Do not refer to or use your organization’s affiliation when engaging in personal political campaign or lobbying activities.
  • Do not use any of your organization’s social media accounts (Facebook, Twitter, Instagram, Snapchat, etc.) to make candidate-related or lobbying comments that appear to be associated with the employer.  Do not tag, mention or link the organization’s social media accounts in or to any political campaign-related or lobbying-related posts, tweets, blog posts, etc. or use the organization’s equipment to compose, transmit or otherwise distribute any such tweets, posts, etc.
  • Do not engage in any political campaign or lobbying activity on work time.

It’s critical that you make your employees aware of the rules and consequences that can stem from violating federal tax laws associated with campaign activity.