Electioneering and Tax Law:

Organizations to which donations are tax-deductible (so-called 501(c)(3)s) — including religious organizations — aren't allowed to expressly support or oppose the election of candidates, and are limited in their lobbying for the enactment of legislation. General public education, including advocacy, is fine, but not electioneering or (too much) lobbying; if they want to do that, they need to set up arms that collect non-tax-deductible donations (so-called 501(c)(4)s, as opposed to the 501(c)(3)s).

The Court has upheld this scheme against First Amendment challenge, reasoning that tax exemptions for contributions are a form of subsidy, and the government can impose restrictions on what this subsidy is used for, so long as they are viewpoint-neutral (i.e., no electioneering would be fine, no electioneering in favor of racist candidates would not be). Of course, there are often difficulties in deciding what's forbidden express support or opposition and what's permitted education and advocacy; the IRS has new guidance on the electioneering side of the question.

In any case, Paul Caron (taxprof) passes along an interesting new controversy on this, not terribly novel legally but striking because of the speech involved: An Internet message from an evangelist that "If You Vote for Mitt Romney, You Are Voting for Satan." Talk about demonizing your opposition. In any event, an excerpt from Paul's post,

[T]oday's Washington Post item Separation of Church and State and Tax Exemptions:

Florida evangelist Bill Keller says he was making a spiritual — not political — statement when he warned the 2.4 million subscribers to his Internet prayer ministry that "if you vote for Mitt Romney, you are voting for Satan!"

But the Washington-based advocacy group Americans United for Separation of Church and State says the IRS should revoke the 501(c)(3) tax-exempt status of Bill Keller Ministries, nonetheless.

Paul points out that the evangelist's statement was indeed likely illegal (again, for a 501(c)(3) that's using tax-exempt funds).

Laura S.:
What about the argument that tax-exempt status for religious organizations is in fact compelled by the first amendment. Thus, the subsidy-permits-rules argument holds no water because there is no subsidy, only a requirement that the tax-code comport with the first amendment's religious protections.
6.3.2007 1:12am
Dave N (mail):
I am neither a Mitt Romney supporter nor have much use for Bill Keller but I have even less use for Americans United for Separation of Church and State--since my perception is that organization is actively hostile toward religion and religious expression of any kind.

All that said, there are many sincere fundamentalist Christians who believe the Mormon Church is a non-Christian "cult"--though they and many Mormons agree on a whole host of social issues. Consequently, Mormons are condemned to Hell.

I agree that Keller's statement, directed at a specific candidate, is political in nature. Had he said, "If you vote for a Mormon, you are voting for the voice of Satan" (or something similar) that would be a closer (Situation 13 of the IRS guidelines is the one most on point).

(Judith Kindell of the iRS deserves praise for preparing a fairly clear-cut set of examples that are easy for any 501(c)(3) organization to understand).
6.3.2007 1:34am
Eugene Volokh (www):
Laura S.: What exactly is the foundation for the argument you refer to? I'd never heard it made, and I don't quite see how it would be made persuasively.

Say the government said, "We're going to take 30% of every dollar you make. What you do with the remainder is your business. If you spend it on charitable contributions, that's fine; but we won't reduce your tax burden at all because of your choice to spend it that way." How exactly would one argue that, as applied to contributions to churches, this violates the First Amendment, and the Free Exercise Clause compels the government to reduce one's tax burden because of one's decision to make religious contributions?
6.3.2007 1:42am
I express no opinion on the contents or merits of the statement. However, the idea of the government sending agents into a church to take notes on the content of a sermon has alwsys struck me as troubling. Could a vindictive government have revoked Martin Luther King Jr.'s Church's tax-exempt status and demanded back taxes because the "I have a dream" speech endorsed legislation? It seems that there should be some line between simply giving a speech or making a statement, on the one hand, and active campaigning on the other. How to draw such a line, and which side this case falls on, I am not sure.
6.3.2007 2:01am
Brian K (mail):

just out curiosity, why wouldn't the government be able reduce the tax burden if the religious group if they used the money for charitable purposes? or is that just your example?

6.3.2007 2:05am
Maureen001 (mail):

Florida evangelist Bill Keller says he was making a spiritual -- not political -- statement when he warned the 2.4 million subscribers to his Internet prayer ministry that "if you vote for Mitt Romney, you are voting for Satan!"

It is what it is...a 501(C)(3) violation. But one statement in and of itself is not sufficient for Rev. Keller to lose his tax exempt status. It is sufficient for Americans United for Separation of Church and State to file a complaint with the IRS and for the IRS to initiate an investigation. That is not pleasant. The good reverend's church records are going to be sliced and diced to the nth degree in order for the IRS to determine whether there is a pattern of violation; that pattern may include frequency of comments, actual or in-kind support of a candidate or political party, how close the comment is made to an upcoming election (not very, in this case), and a host of other criteria. Yep, he blew it. Yep, he's going to be sorry while the IRS sorts it out. But if this is an infrequent or one-time violation, he'll be all right.

But how is it that Reverend Jesse Jackson and the right-Reverend Al Sharpton maintain their 501(C) (3) status in view of their repeated and ongoing violations?

I've been actively involved with a variety of 501(C)(3)s for over 30 years and have acted diligently to protect the tax-exempt status of each and every one. I just don't understand how political candidates can get away with appearing in churches right before an election or church leaders can be so involved in a political process with so little visible repercussion.
6.3.2007 2:07am
Laura S.:
Prof. Volokh,

Yes, I think my original thoughts were too hazy. I'd suggest (for discussion) that the Free Exercise Clause requires religious organizations to be granted tax-exempt status. Now 501(c) defines 28? classes of tax-exempt status. Anyone of these would be enough to satisfy the principle I've just asserted. The question then must be, can the government discriminate among religious organizations to place them in different categories?

Doing so would seem to impinge on Free Exercise to a degree, but so do many laws--e.g., building codes. So is this permissible or not?

Operating under the assumption that this question would be subject to strict scrutiny. The government has the burden to demonstrate the constitutionality of its laws under a review.

Is "its a subsidy" is a sufficient defense to the discrimination between two religious groups?

I don't think that sort of distinction can be shown to serve a compelling public-interest. Nor frankly does it seem very narrowly tailored.
6.3.2007 2:11am
Maureen001 (mail):
ReaderY: The IRS doesn't do anything if there is no complaint filed.

There is also a 95% sort of rule of thumb the IRS refers to; at least 95% (measureable how?) of the activity of the tax-exempt organization must be related to its exempt purpose. Clearly that purpose does not include warning followers/contributors not to vote for the Devil Incarnate/political candidate in an election.
6.3.2007 2:13am
JohnDavidGalt (mail):
Is this rule against tax-funded election-issue advocacy just a federal regulation, or is it a constitutional issue, binding on state and federal governments? If it's not the latter, I wish it were.

Out of simple fairness, I'd like to see the rule enforced against:

(1) California's tax-funded anti-smoking campaign (, which explicitly advocates public support for the state's excessive laws against smoking in public places and advocates an eventual ban on tobacco;

(2) the federal "Violence Against Women Act" which funds extremist man-hater groups and propaganda; and especially

(3) the Office of National Drug Control Policy, which campaigned against initiatives to legalize medical marijuana in at least six states.

We don't have real democracy as long as officials are allowed to do any of these things.
6.3.2007 2:18am
logicnazi (mail) (www):
What I don't see is how this policy can both avoid a challenge as an illegitimate restraint on free speech and as an impermissable government subsidy of a religious viewpoint.

In particular if this is viewed as a subsidy it is a subsidy for only those religious views that don't directly refer to political candidates or the moral status of voting. Surely the separation of church and state cannot allow the government to disfavor a religion which worshiped John McCain as god's prophet destined to lead the US to greatness if elected nor one that viewed Hillary Clinton as the Antichrist. So if this tax exempt status is a subsidy it seems it violates the establishment clause.

Note there need not be any actual church with views over the line for this to be a violation. A successful campaign by the government to bribe churches into not holding certain views is no more acceptable under the separation of church and state than an unsuccessful one.

On the other hand if we don't view the tax break as a subsidy then it is an illegitimate restraint on free speech.
6.3.2007 2:28am
Eugene Volokh (www):
Brian K: I was just giving an example in which the government chose not to provide a tax exemption, to test Laura S's theory.

Laura S: I don't think it's quite right to characterize this as "the government discriminat[ing] among religious organizations to place them in different categories." The rule doesn't single out religious organizations; it applies to all tax-exempt groups, many of which are secular advocacy groups. Nor does it facially or intentionally discriminate based on their religiosity, denomination, or theology.

Rather, it applies a secular test applicable to all organizations: This subsidy -- which is what the deductibility of contributions to a group is -- is not available for electioneering or lobbying; use this subsidy for other purposes, and if you want to electioneer or lobby, use money you've collected without this subsidy (i.e., non-tax-deductible contributions).

True, this will in some way have different impacts on different groups. Groups whose ideologies lead them to electioneer will have to start up 501(c)(4)s; groups whose ideologies don't lead them to electioneer won't have to bother. But such a disparate impact -- which is commonplace with a wide range of regulation -- surely doesn't make the law unconstitutional religious or viewpoint-based discrimination; First Amendment law is quite clear on that.
6.3.2007 2:39am

(Judith Kindell of the IRS deserves praise for preparing a fairly clear-cut set of examples that are easy for any 501(c)(3) organization to understand).

I agree, and I'm not surprised. I worked with her in private practice in the 80's. She's a very good lawyer.
6.3.2007 9:09am
JRW (mail) (www):
John David -- There is a significant difference in the regulations between legislation and candidates.

A 501(c)(3) is absolutely barred from electioneering (for candidates).

A 501(c)(3) is only prohibited from spending more than a "substantial part" on legislation and/or lobbying. This is usually about 5%, though there is also a safe harbor in 501(h).
6.3.2007 9:32am
Sarah (mail) (www):
I was going to say -- lots of churches (and other 501(c)(3)s) campaign for legislation on a daily basis. Every year around August or September (sometimes October, or not at all in an off-year) we get a letter read in our church reminding us that campaigning for a candidate or using church materials or databases for campaigning is strictly off-limits, and that the church only takes a stand on legislation directly pertaining to "moral issues." I'm sure there have been a few other local ones, but the only two I can think of have to do with gay marriage in the last few years, and the ERA thirty-odd years ago. Since most of the church's funds go to physical facilities, humanitarian aid, education (pure vanilla "run a university" style, rather than pamphlets and benefit luncheons) and missionary efforts anyway, it's easy for them to adhere to a "don't spend too much" rule.
6.3.2007 10:41am
"But such a disparate impact -- which is commonplace with a wide range of regulation -- surely doesn't make the law unconstitutional religious or viewpoint-based discrimination; First Amendment law is quite clear on that."

With all due respect, how profoundly discriminatory this line of precedent is; whenever there's a category that's not even in the constitution (like with the Eharmony case discussed previously, or even Lawrence...), many (especially on the left) bend over backwards to consider any conceivable disparate *impacts* of "facially" nondiscriminartory policies...even when it's not being done by the state. So Evangelicals are getting squeezed from all sides: open a private business with a disparate impact, and it's lawsuit city; but when it happens to you (by the STATE!), it's just tough...

This is in effect assessing a "fine" to those sects whose theology compels electioneering. It was passed for that very kind of social-engineering reason, and I can attest that it has a STIFLING effect on ability to express/execise certain theological convictions (another double standard, vis a vis free-speech jurisprudence). (Much internal discussion centers around how "far to go" and whether to risk the "punisment," but such a Hobsons-choice situation isn't so cavalierly accepted when it's against other groups...)

Many separationist-Christians like Lynn argue *for* this discrimination on the grounds that *they* view religion and politics as separate. I certainly welcome them to that interpretation of scripture, I just wish Congress didn't make it the "official" interpretation -- under penalty of fine.
6.3.2007 11:10am
byomtov (mail):
What I don't see is how this policy can both avoid a challenge as an illegitimate restraint on free speech and as an impermissable government subsidy of a religious viewpoint.

Keller's free spech is not being restrained any more than yours or mine. We can say whatever we want to about candidates, print flyers, etc. But if we solicit contributions to help us the contributors don't get a tax deduction.

The subsidy argument doesn't hold either. The government grants tax exemption for some activities and not others. Those that don't get it include electioneering. Calling electioneering a religious activity doesn't change that, any more than calling a horse a cow makes it one.
6.3.2007 11:35am
SomeJarhead (mail):

(so-called 501(c)(4)s, as opposed to the tax-exempt 501(c)(3)s)

Not even close, professor. Not even close.

Organizations with status under IRC 501(c)(4) are every bit as tax-exempt as those under 501(c)(3). See,

That's a rookie mistake.
6.3.2007 11:51am
Uh...the biggest benefit of a 501(c)(3) is the contributors get a deduction...this is not true of a 501(c)(4).
6.3.2007 11:53am
Eli Rabett (www):
As in

The Internal Revenue Service is examining the tax-exempt status of a liberal church in Southern California because its former pastor delivered a fiery antiwar sermon that criticized President Bush by name on the Sunday before the 2004 presidential election.

It strikes me that you are ignoring the elephant in the Justice Department again.
6.3.2007 12:14pm
Eric Novack (mail) (www):
Having reviewed the linked IRS document, it appears to refer only to candidates or issues as it relates to candidates.

Any guidance on 501(c)3 IRS rules vis a vis state initiative campaigns?
6.3.2007 12:27pm
Recovering Law Grad:
Mr. Keller's statement seems to implicate the rule directly. I don't think this one is close.
6.3.2007 12:28pm
BTW, I've always felt the first amendment says "no law," not "no law intended to . . . " or " . . . unless there's a compelling interest" or any other contrived excuse to abridge the liberty. Once liberty becomes subject to anyone's judgments or balancing tests it becomes meaningless, since there will always be a reason that seems "compelling" to someone. (And, basing it on whether Congress "intends" to target certain religious groups presumably wouldn't work, since all my non-originalist friends tell me it's "impossible" to ascertain legislative intent (sarcasm).)

Again, it seems we're all SO hypersensitive about even the slightest intervention (even withholding a "subsidy," which I do NOT even concede a tax exemption to be!) to actively disincentivize any other kind of expression...
6.3.2007 3:35pm
Eugene Volokh (www):
SomeJarHead: Sorry -- I meant to use "tax-exempt organizations" as shorthand for "organizations donations to which are tax-deductible" (see Esquire's comment), and thought that this was clear in context, but your comment led me to edit the post to be more precise on this. Thanks! JRW: Thanks also for pointing out that lobbying isn't categorically forbidden to 501(c)(3)s; I've revised the post to reflect that, too.

Esquire: You can't have an effects test under which all speech restrictions -- and especially denials of subsidy -- that have viewpoint-based effects are unconstitutional. Bans on loudspeakers in residential neighborhoods will disproportionately affect those movements that use loudspeakers. Subsidies for scientific speech and not other speech will disproportionately affect some ideologies; a rule that university classrooms are available after hours only for curriculum-related events will do the same. That's why disparate impacts are generally not enough to trigger First Amendment scrutiny (or for that matter Equal Protection Clause scrutiny).
6.3.2007 5:26pm
Prof. Volokh,

At the very least, I do think an "effects test" is entirely appropriate for content -- even if not for related conduct, time, place, manner, etc. (as in your loudspeaker or after-school examples). You made me realize, though, that I might ultimately have to hang my hat on my view that tax-exemption is not a "subsidy," because in the interest of honesty I also believe the state has a right to non-coercively endorse select things like the ten commandments (as recently litigated to utter confusion!).

There's a difference between discriminating based on how one acts out his faith, vs. what one SAYS about his faith. I think it's frankly a tragedy that Pastors have to parse their sermons every even-numbered year to make sure they don't phrase any church positions in a state-forbidden way. (Calling this "electioneering activity" doesn't make it so any more than calling all sorts of conduct "speech" to innnoculate it.)

Thinking through a "test suite," I think I'm pretty comfortable saying that all religious content (whether "category" or "viewpoint") should get the exact same governmental treatment in all cases...
6.3.2007 7:33pm
(I should qualify my last statement to exclude actual (active, not passive) subsidies, since I had already conceded above that my position might indeed rely on that assumption.)
6.3.2007 7:40pm
ed (mail) (www):


What if a representative of a tax exempt organization uses the facilities of a non-tax exempt to produce and distribute a political message, but does so as an individual and not as the representative of the tax exempt organization?

Is this still a violation?

So let's say I create an internet based radio/tv station dedicated to political causes. I invite "Florida evangelist Bill Keller" to explain his personal views to the listening/watching audience while having promoted the show beforehand to his audience in order to increase the potential audience for the show.

Am I in trouble even though I'm not tax exempt?

Is he in trouble even though I'm not tax exempt?

Is he in trouble even though he's on the show as a private individual and not specifically as a representative of his tax exempt organization?

Is his tax exempt organization in trouble for accepting paid advertising from my non tax exempt organization?

It the answer is "no" across the board, then isn't that a rather large loophole? And if any answer is "yes", then isn't that rather illogical?
6.4.2007 12:41am
Atlantic06 (mail):
When I first served on the board of a non-profit, 501(c)(3) organization, the charity's attorney informed us that we could endorse a cause, but not a candidate.

I didn't find it a difficult concept to grasp.

Most organizations that want to endorse and support individuals running for office form separate entities -- even for-profit corporations do so when they create PACs.
6.4.2007 12:47am
Dave N (mail):

I commend Judith Kindell's analysis (EV links it) and it answers your questions: The answer to NO to all of them.

Bill Keller has the same First Amendment rights as any other American. This DOES NOT change because he works for a 501(c)(3) organization-- or even heads it.

However, his 501(c)(3) MAY NOT endorse a candidate. Simple enough.

Think of it this way. Jerry Falwell was pastor of Liberty Baptist Church. He also headed the Moral Majority.

His church endangered its tax exempt status if he endorsed political candidates from the pulpit. However, when he spoke at Moral Majority functions and as head of the Moral Majority, the fact that he was also a religious leader was legally irrelevent.
6.4.2007 2:17am
logicnazi (mail) (www):
bymotv, Eugene,

I see my error. Somehow I missed the part in the main post where it said that this wasn't a special rule applied to religious content but a general rule applied to all non-profits. As a generally applicable rule and not a specific stipulation on religion I agree it's perfectly fine.

I just had this weird assumption that somehow this was applied specifically to religion and I didn't pay enough attention to the post.
6.4.2007 3:17am
Public_Defender (mail):
Yale Law Professor (and a skeptic of church/state separation) Stephen Carter places a high value on religious speech, so he's suggested that churches, church members, and society as a whole would be better off if churches just paid their taxes.

Some religious leaders talk about how precious their First Amendment rights are, but then they sell off those rights for a tax break. I guess that tells us where their priorities are.

They made their deal with Ceasar by asking Ceasar to give them non-profit status under 501(c)(3). The government will let them out of the deal any time they want.
6.4.2007 5:31am
Houston Lawyer:
Clearly the IRS has been lax in enforcing this rule. All my life I've seen video clips of political candidates, usually Democrats, speaking from the pulpits of churches, usually Black. If this is OK, I don't see what would be prohibited.
6.4.2007 12:04pm
A lot of folks seem to be viewing tax exemptions as a sort of "bargain" with the state...interesting, but I'm not sure if that's the historical conception. (I'll need to research that a bit more.) However, if the state can indeed put theologically-restrictive terms on this "bargain," there surely there are NO "conditions" that would EVER be off-limits.

I sure hope nobody who supported the law schools in the Solomon Amendment case (demanding an unconditional right to force taxpayers to actively subsidize discrimination against the military) or supported the Brooklyn Museum of Art against Giuliani (demanding a right to force taxpayers to actively subsidize anti-religious "art" -- or none at all) would support this quasi-censorship of those denominations advocating a non-separationist theology.
6.4.2007 12:57pm

In some Christian organizations (my school comes to mind) there is an ongoing discussion about this. If electioneering is off limits now, might holding views of "discrimination" also become off limits? If discrimination is off limits, who decides what falls into the catagory? If a girl has a kid out of wedlock, can she be expelled?
6.4.2007 2:09pm
That can't be right, the dems are always allowed to use churches for political speeches and rallys. In fact, in the local ghetto city church busses and vans are used for Dem 'get out the votes'.

Oh, wait, this preacher may not be a dem. That would be illegal then.
6.4.2007 5:54pm