Commission Recommendations - Government Regulation of Political Speech - Proposed Solutions

 

The Commission recommends a multifaceted approach to addressing the untenable state of affairs related to the 501(c)(3) political campaign prohibition. Should the recommendations contained herein be codified into law and/or Treasury Regulations, organizations that engage in campaign-related communications as described herein should, under the advice of counsel, ensure that such communications comply with applicable election laws and other laws in applicable jurisdictions.

  1. The law prohibiting political campaign participation and intervention by 501(c)(3) organizations should not be repealed.

    The Commission believes that a public policy purpose is served by prohibiting 501(c)(3) tax-exempt organizations from expending funds for political campaign-related activities. There is broad agreement among the Commission and Panel members that it is not in the public interest to permit tax-deductible funds to be used for political campaign purposes. The basis for that position has three primary elements:

    1. Given the fact that taxpayers who make contributions to 501(c)(3) organizations are permitted to deduct the contributions for income tax purposes, we believe it is in the public interest not to permit tax-deductible funds to be used for political campaign purposes—especially since contributions made to political campaigns are not tax-deductible.
    2. The groups who find the current prohibition to be troubling, limiting, frustrating, and even potentially unconstitutional, do not generally seek the ability to take tax-deductible contributions made by donors and relay them to political campaigns. Rather, they generally seek freedom of expression in the context of their ordinary tax-exempt activities.
    3. There is a high level of agreement among Commission and Panel members that permitting the disbursement of funds by religious and other 501(c)(3) organizations for political campaign activities would likely have a deleterious impact on the effectiveness and credibility of the nonprofit sector.

    Repeal of the prohibition would permit 501(c)(3) organizations to make direct political campaign expenditures to the extent such activity is not prohibited by other laws. For example, if the prohibition were repealed, 501(c)(3) organizations would be permitted under the laws of a number of states to make direct political campaign contributions. 501(c)(3) entities not organized as corporations might be permitted to make political campaign contributions to candidates for federal office.

    In arriving at this recommendation, the Commission considered the possibility of recommending that political campaign activities of 501(c)(3) organizations be subject to the same rules that exist currently for lobbying by 501(c)(3) public charities—that such activities would be permissible so long as they do not constitute a "substantial part" of an organization’s activities. (The Introduction and Background section of this Report includes additional information about the lobbying limitation for 501(c)(3) organizations. Click here to view PDF of the report.) The Commission does not believe such an approach would be the ideal solution, primarily because permitting all types of political activity by 501(c)(3) organizations within limits would permit them to make direct political campaign contributions and other political expenditures with tax-deductible funds.

  2. Definitional guidance should be added to the law to clarify that certain communications that are made in the ordinary course of a 501(c)(3) organization’s regular and customary exempt-purpose activities and that do not involve an expenditure of funds do not constitute participation or intervention in a political campaign.

    As stated in the Message from the Chairman at the beginning of this Report, (Click here to view PDF of the report.) a key principle on which there is much accord among the members of the Commission and its Panels is the belief that a member of the clergy should be permitted to say whatever he or she believes is appropriate in the context of a religious worship service without fear of government reprisal, even when such communications include content related to political candidates. Similarly, there is a high level of agreement that if religious organizations have such latitude, comparable latitude should exist for secular nonprofit organizations.

    The Commission believes that a communication related to one or more political candidates or campaigns that is made in the ordinary course of a 501(c)(3) organization’s regular and customary religious, charitable, educational, scientific, or other exempt-purpose activities should not constitute a prohibited activity under Section 501(c)(3), so long as the organization does not incur more than de minimis incremental costs with respect to the communication (that is, the organization’s costs would not have been different by any significant amount had the communication not occurred). This exception could possibly be referred to as the exception for "no-cost political communications." The exception should expressly include sermons and other communications delivered as part of a religious organization’s regular and customary worship services, provided that no more than de minimis incremental costs are incurred for communications directly related to one or more political candidates or campaigns. The Commission recommends that Congress adopt legislation making such a clarification in connection with Section 501(c)(3), and that conforming changes be made to other relevant provisions of the law, such as Sections 170, 527, 2055, 2106, 2522, 4955, 6852, and (possibly) 7409 (see further reference to Section 7409 below).

    We recommend that Congress direct the Treasury Secretary to make conforming changes to the Treasury Regulations and to adopt Regulations that apply reasonable guidelines for determining whether (i) a communication is made in the ordinary course of an organization’s regular and customary religious, charitable, educational, scientific, or other exempt-purpose activities; and (ii) the incremental costs for such communication are de minimis. Such Regulations should expressly provide that sermons and other communications that are delivered as part of a religious organization’s regular and customary worship services constitute communications made in the ordinary course of a religious organization’s regular and customary exempt-purpose activities.

    The basic purpose and principle of this recommendation is to acknowledge the sacred and protected value of freedom of expression with respect to all persons and organizations and to permit such expression within the context of otherwise exempt-purpose activities, so long as such communications do not involve the disbursement of tax-deductible funds.

    The Commission strongly believes that adoption of this recommendation will eliminate most of the challenges associated with administration of the existing law based on the following observations:

    1. Many of the challenges surrounding administration of the existing prohibition relate to statements made by religious and other nonprofit leaders during worship services or other exempt-purpose functions or in exempt-purpose publications or media. Implementation of the recommendation described herein will largely eliminate the challenges associated with applying the law in connection with such activities and will represent deference to the First Amendment freedoms that are so precious to Americans.
    2. This recommendation appropriately respects the reality of many African-American and other churches where communications and expressions about socially relevant topics, including candidates and campaigns, are central to their culture and character. Implementation of this recommendation will substantially eliminate the IRS’s dilemma with respect to addressing such realities in the context of worship services or similar activities.
    3. Implementation of this recommendation will eliminate the challenges posed to the IRS by churches (such as those participating in "Pulpit Freedom Sunday" sponsored by Alliance Defending Freedom) that deliberately engage in political communications in the context of worship services in the hope that the IRS will initiate an examination and permit them to litigate the issue.
    4. This recommendation should permit the IRS to demonstrate an even-handed approach to administering the law by eliminating many of the bases for allegations of selective or inconsistent enforcement of the prohibition.
    5. This recommendation will eliminate the obligation of the IRS to evaluate the speech of nonprofit leaders vis-à-vis vague "facts and circumstances" guidelines to discern whether or not such speech is political—a challenge that is particularly troublesome when the organization is a religious institution.

    Due to the dramatic simplification that will result from adoption of this recommendation, substantial time and cost resources of the IRS that could arguably be spent in more important areas of tax administration may be redirected.

    At the same time, this recommendation preserves the economic policy purpose of not permitting the use of tax-deductible funds for political purposes. Analogously, in Regan v. Taxation With Representation, the United States Supreme Court held that the lobbying limitation that applies to 501(c)(3) organizations is constitutional.1 In so doing, the Court noted:

    The Code does not deny TWR the right to receive deductible contributions to support its nonlobbying activity, nor does it deny TWR any independent benefit on account of its intention to lobby. Congress has merely refused to pay for lobbying out of public monies....Congress has not infringed any First Amendment rights or regulated any First Amendment activity. Congress has simply chosen not to pay for TWR’s lobbying.2

    One may reasonably infer from the Supreme Court’s comments regarding lobbying activity that the key public policy issue at question is the use of tax-deductible funds . . . not the speech or communication itself. The Commission believes the recommendation described herein strikes the right balance between respecting the proper use of tax-deductible contributions and respecting the First Amendment rights of free exercise of religion and free speech. The Commission’s recommendation does not require Congress to "pay for" an organization’s incidental political communications. The Commission also recognizes that most 501(c)(3) public charities receive a portion of their support from donors who do not itemize deductions or who otherwise do not receive a tax benefit associated with their charitable giving. That fact supports the position that this recommendation does not involve the use of tax-deductible funds to support political communications, notwithstanding that de minimis expenditures would be permitted.

    Another advantage of the approach afforded by this recommendation is purely logistical. By clarifying the definition of participation or intervention in a campaign in the manner recommended, as opposed to amending Section 501(c)(3) itself, no changes are required in the fundamental aspects of qualifying for tax exemption. Organizations applying for exemption for recognition under Section 501(c)(3) will not be required to include new or different provisions in their governing documents, and existing 501(c)(3) organizations will not be required to amend their governing documents in order to avail themselves of the modified definition (unless their governing documents contain self-imposed provisions not required under existing law for 501(c)(3) organizations).

    The Commission respectfully acknowledges that participants constituting a minority of its Panel members do not concur with the recommendations described herein that would modify the definitions in the law so as to permit churches and other 501(c)(3) organizations to engage in communications advocating the election or defeat of specific candidates provided that such communications do not involve additional or incremental expenditures.

    The Commission also acknowledges that opinions differ widely among religious and other 501(c)(3) organizations as to whether it is appropriate to engage in certain political communications. Such determinations should be made by each organization, taking into consideration the organization’s culture and constituencies. Many organizations will choose as a matter of their own policy not to take positions or engage in communications that relate to political candidates or campaigns. Given the fact that relatively few 501(c)(3) organizations choose to engage in lobbying activities even though they have been permitted to do so within limits under existing law, it is reasonable to expect that relatively few 501(c)(3) organizations will choose to engage in political campaign-related communications. An organization’s views about whether to engage in certain types of political communication may change over time as both the organization and our culture continue to change.

  3. For activities or communications that are not "no-cost political communications" as described in Recommendation 2 above, Congress should adopt clarifying provisions in the law establishing that only the following actions constitute prohibited political campaign participation or intervention:

    1. A communication that involves an expenditure of funds, and

      1. Clearly identifies one or more political candidates for public office or one or more political parties or political organizations described in Section 527 of the Internal Revenue Code by name, title, party affiliation, audio or visual likeness, or other distinctive characteristics; and

      2. Contains express words of advocacy to:

        1. elect or defeat one or more such candidates, or
        2. make contributions to one or more clearly identified candidates, political parties, or political organizations described in Section 527 of the Internal Revenue Code;

      or

    2. A contribution of money, goods, services, or use of facilities to one or more political candidates, political parties, or political organizations described in Section 527 of the Internal Revenue Code.

    As is more fully described in the section of this Report entitled "Why the Status Quo is Untenable," the vagueness of current guidance creates an environment in which nonprofit organizations that engage in communications about the moral and social issues of the day can never quite know for certain whether the IRS will deem their communications to constitute prohibited political campaign participation or intervention. Such uncertainty serves to chill permissible speech and make administration of the law a virtually impossible task. The recommendation set forth herein establishes much-needed clarity with respect to what constitutes participation or intervention in a political campaign. The Commission believes that "brighter lines" in this area will be advantageous to exempt organizations and the Internal Revenue Service alike. With clearer, brighter lines of definition, 501(c)(3) organizations (especially those engaged in addressing the social and moral issues of the day) will be able to carry out their exempt purposes with a greater degree of confidence.

  4. Congress should clarify in the law its intent that the Section 4955 excise taxes on political expenditures by 501(c)(3) organizations serve as intermediate sanctions and are to be applied as the exclusive sanction in cases where political expenditures are made by a 501(c)(3) organization that are inadvertent or are not substantial or frequent in relation to the organization’s activities as a whole. Section 4955 excise taxes should be imposed only on:

    1. A communication that involves an expenditure of funds, and

      1. Clearly identifies one or more political candidates for public office or one or more political parties or political organizations described in Section 527 of the Internal Revenue Code by name, title, party affiliation, audio or visual likeness, or other distinctive characteristics; and

      2. Contains express words of advocacy to:

        1. elect or defeat one or more such candidates, or
        2. make contributions to one or more clearly identified candidates, political parties, or political organizations described in Section 527 of the Internal Revenue Code;

      or

    2. A contribution of money, goods, services, or use of facilities to one or more political candidates, political parties, or political organizations described in Section 527 of the Internal Revenue Code.

    Congress should further clarify in the law its intent that the sanction of revocation of exempt status should be applied only in cases where Section 4955 taxes apply and where the prohibited campaign participation or intervention is willful and substantial or frequent in relation to an organization’s activities as a whole. Congress should direct the Secretary of the Treasury to adopt conforming Regulations. We recommend that the Treasury Secretary, in adopting conforming Regulations, apply the principles in Treasury Regulations § 1.501(c)(3)-1(f)(ii)-(iii) (related to determination of whether revocation of tax-exempt status is appropriate when Section 4958 excise taxes for excess benefit transactions also apply.)

    As is mentioned in the Grassley Staff Report, under current law, a single violation of the political campaign prohibition by a 501(c)(3) organization is a basis for revocation of the organization’s exempt status by the Internal Revenue Service.3 Evidence of the IRS’s position in this regard is found in the following excerpt from Revenue Ruling 2007-41:

    However, for their organizations to remain tax exempt under section 501(c)(3), leaders cannot make partisan comments in official organization publications or at official functions of the organization.4

    No other provision of federal tax law has the potential to invoke the "nuclear" penalty of loss of exempt status for what one organization’s leader may say in one or a few instances. Imposing so harsh a penalty in such cases is not only unfair, it is unpalatable—which is why the IRS rarely invokes it under existing law. But the IRS should not even have such authority in the case of insubstantial violations. The recommendation described herein will largely eliminate the unnecessary and harsh threat of revocation in cases where violations are insubstantial or infrequent in relation to an organization’s activities as a whole.

    An analogous area of federal tax law exists with respect to excess benefit transactions and the related excise taxes under Section 4958. Excess benefit transactions are generally a form of private inurement. Private inurement is prohibited for 501(c)(3) and certain other organizations, and can be the basis for denial of exempt status by the IRS. In establishing "intermediate sanctions" (the excise taxes on excess benefit transactions under Section 4958), Congress expressed its intent that the excise taxes would be assessed as the sole sanction in the case of violations that are not substantial or egregious.5 The Treasury Department subsequently adopted Regulations that provide guidance as to whether revocation of tax-exempt status is appropriate when Section 4958 excise taxes for excess benefit transactions also apply.6 The Commission believes that comparable guidance can and should be provided with respect to violations of the political campaign prohibition by 501(c)(3) organizations once Congress makes the statutory changes recommended herein.

  5. Section 7409 of the Internal Revenue Code (permitting the IRS to obtain a court injunction prohibiting a 501(c)(3) organization from making further political expenditures) should be repealed.

    As described in the Introduction and Background section of this Report, federal law provides that the U.S. government may obtain a court injunction prohibiting a 501(c)(3) organization from making further political expenditures in the event the organization has flagrantly violated the campaign intervention prohibition in Section 501(c)(3) and other specified criteria are met. A lack of evidence to the contrary suggests that the IRS has never asserted the authority to obtain a court injunction to stop future campaign intervention by a 501(c)(3) organization.

    It is not clear what public policy purpose is served by Section 7409. If a 501(c)(3) organization has flagrantly violated the political campaign prohibition in Section 501(c)(3), the IRS is permitted to revoke the organization’s tax-exempt status. The recommendations contained herein would continue to permit revocation of exempt status when an organization violates the prohibition in a manner that is substantial or frequent in relation to an organization’s activities as a whole. Revocation may be made effective as of the date the organization engaged in the substantial violation. If an organization’s 501(c)(3) status has been revoked, it is no longer a tax-exempt organization. It is difficult to comprehend a valid public policy purpose that would permit the federal government to prohibit an organization from engaging in political activities if it is no longer tax-exempt. To do so would seem to present substantial constitutional concerns. Given these observations and the fact that the IRS has apparently never asserted its authority under Section 7409,7 the Commission recommends that Section 7409 be repealed.

Examples

  1. Oak Lane Church (OLC) is a 501(c)(3) public charity and is a church. OLC conducts regular weekly worship services that include prayer, scripture reading, singing, and other worship activities. During a regular worship service, OLC’s officiating minister makes statements in support of a particular candidate for public office and encourages the congregation to vote for that candidate. OLC’s media ministry makes audio and video recordings of all sermons available to anyone upon request and posts recordings of all sermons on its website in the ordinary course of its regular and customary exempt-purpose activities. No additional or incremental costs are incurred by OLC in connection with the minister’s statements during the worship service or in the dissemination of the content of the minister’s sermon containing those statements. The minister’s communications related to the candidate would be considered no-cost political communications, and would not constitute prohibited participation or intervention in a political campaign.
  2. Oak Lane Church (OLC) is a 501(c)(3) public charity and is a church. OLC conducts regular weekly worship services that include prayer, scripture reading, singing, and other worship activities. During a regular worship service, OLC invites Candidate R, a candidate for the U.S. Senate from OLC’s state, to deliver a message to the congregation. Candidate R delivers an inspirational message that includes references to her campaign and the improvements Candidate R believes she can bring to the Senate. After Candidate R’s message, OLC’s presiding minister makes statements in support of Candidate R and encourages members of the congregation to vote for Candidate R. OLC’s media ministry makes audio and video recordings of all worship services available to anyone upon request and posts recordings of all worship services on its website in the ordinary course of its regular and customary exempt-purpose activities. No additional or incremental costs are incurred by OLC in connection with Candidate R’s message or the communications by the presiding minister during the worship service or in connection with the dissemination of the content of the worship service. The communications related to Candidate R’s candidacy would be considered no-cost political communications, and would not constitute prohibited participation or intervention in a political campaign.
  3. Oak Lane Church (OLC) is a 501(c)(3) public charity and is a church. OLC conducts regular weekly worship services that include prayer, scripture reading, singing, and other worship activities. OLC holds a special political campaign rally for selected candidates for public office. The rally is separate and distinct from OLC’s regular worship services and its other regular and customary exempt-purpose activities. Communications made during and related to the rally clearly identify candidates for public office and encourage people to vote for the candidates and to support them financially. OLC incurs costs to conduct the rally, and the costs are not de minimis. OLC’s activity of conducting a special campaign rally is not a no-cost political communication, but rather would constitute prohibited political campaign participation or intervention. The expenditures for conducting the rally would constitute political expenditures subject to the excise taxes under Section 4955 of the Internal Revenue Code.
  4. Oak Lane Church (OLC) is a 501(c)(3) public charity and is a church. The leadership of OLC favors a particular candidate for an upcoming election. OLC makes monetary contributions to the political campaign of the candidate favored by OLC’s leadership. The act of making the campaign contributions would constitute prohibited participation or intervention in a political campaign and the related expenditures would constitute political expenditures subject to the excise taxes under Section 4955 of the Internal Revenue Code.
  5. Oak Lane Church (OLC) is a 501(c)(3) public charity and is a church. OLC conducts regular weekly worship services that include prayer, scripture reading, singing, and other worship activities. OLC receives printed voter guides in connection with an upcoming election from an unrelated organization at no cost to OLC. The voter guides address candidates’ positions with respect to various issues of importance to OLC and its constituents. The voter guides do not contain language expressly advocating the election or defeat of any specifically-identified candidates. OLC volunteers distribute copies of the voter guides to OLC’s congregation during regular worship services. No additional or incremental costs are incurred by OLC in connection with obtaining or distributing the voter guides. Distribution of the voter guides would not constitute prohibited participation or intervention in a political campaign.
  6. Oak Lane Church (OLC) is a 501(c)(3) public charity and is a church. OLC conducts regular weekly worship services that include prayer, scripture reading, singing, and other worship activities. OLC receives printed voter guides in connection with an upcoming election from an unrelated organization at no cost to OLC. The voter guides address candidates’ positions with respect to various issues of importance to OLC and its constituents. The voter guides do contain language expressly advocating the election or defeat of certain specifically-identified candidates. OLC volunteers distribute copies of the voter guides to OLC’s congregation during regular worship services. No additional or incremental costs are incurred by OLC in connection with obtaining or distributing the voter guides. Distribution of the voter guides would be considered no-cost political communications, and would not constitute prohibited participation or intervention in a political campaign.
  7. Oak Lane Church (OLC) is a 501(c)(3) public charity and is a church. OLC conducts regular weekly worship services that include prayer, scripture reading, singing, and other worship activities. OLC receives printed voter guides in connection with an upcoming election from an unrelated organization at a cost that is more than de minimis to OLC. The voter guides address candidates’ positions with respect to various issues of importance to OLC and its constituents. The voter guides do contain language expressly advocating the election or defeat of certain specifically-identified candidates. OLC volunteers distribute copies of the voter guides to OLC’s congregation during regular worship services. Since OLC incurs additional or incremental costs that were more than de minimis in connection with obtaining the voter guides, OLC’s action of distributing the voter guides would not be considered no-cost political communications. Rather, the related expenditures would constitute political expenditures subject to the excise taxes under Section 4955 of the Internal Revenue Code.
  8. Oak Lane Church (OLC) is a 501(c)(3) public charity and is a church. OLC conducts regular weekly worship services that include prayer, scripture reading, singing, and other worship activities. Utilizing its own staff and resources, OLC creates printed voter guides in connection with an upcoming election. The staff and resources utilized by OLC in creating the voter guides are employed and utilized by OLC in the ordinary course of OLC’s regular and customary exempt-purpose activities without regard to the creation of the voter guides. OLC’s costs would have been the same regardless of whether the voter guides were created, with de minimis exceptions, such as costs for minor office supplies. The voter guides address candidates’ positions with respect to various issues of importance to OLC and its constituents. The voter guides do not contain language expressly advocating the election or defeat of specifically-identified candidates. OLC volunteers distribute copies of the voter guides to OLC’s congregation during regular worship services. Distribution of the voter guides would not constitute prohibited participation or intervention in a political campaign.
  9. Trees Forever (TF) is a 501(c)(3) public charity dedicated to protecting and preserving the environment. TF regularly produces and issues a newsletter several times a year for its donors and other interested parties. The newsletter contains information about TF’s programs and activities as well as a solicitation for contributions. The newsletter is ordinarily distributed by mail, email, and by posting in a blog on TF’s website. Each newsletter ordinarily includes an editorial article—typically authored by TF’s president. An editorial in one of the regular newsletters includes statements by the president of TF in favor of specific candidates for public office as well as statements in favor of candidates of a particular party. The president urges readers to vote for those candidates. No additional or incremental costs are incurred by TF in connection with the president’s statements or the distribution of the newsletter. The communications related to the candidates would be considered no-cost political communications, and would not constitute prohibited participation or intervention in a political campaign.
  10. Trees Forever (TF) is a 501(c)(3) public charity dedicated to protecting and preserving the environment. TF regularly produces and issues a newsletter several times a year for its donors and other interested parties. The newsletter contains information about TF’s programs and activities as well as a solicitation for contributions. The newsletter is ordinarily distributed by mail, email, and by posting in a blog on TF’s website. TF decides to produce a separate special edition of its newsletter, the content of which is dedicated entirely to supporting a particular group of clearly identified candidates for public office. TF produces the newsletter and distributes it in the same manner it normally uses for distribution of its regular newsletter. Production of the special edition of the newsletter is not a communication made in the ordinary course of TF’s regular and customary exempt-purpose activities, and TF incurs incremental costs associated with the production and distribution of the special edition of the newsletter. TF’s activity of producing and distributing the special edition of the newsletter is not a no-cost political communication, but rather would constitute prohibited participation or intervention in a political campaign. The expenditures for producing and distributing the special edition of the newsletter would constitute political expenditures subject to the excise taxes under Section 4955 of the Internal Revenue Code.
  11. Brighter Times (BT) is a 501(c)(3) public charity whose primary activities consist of providing educational information to the public regarding civil rights issues. BT maintains a robust, multi-dimensional website containing hundreds of pages as the primary means by which its educational information is disseminated. One page of its website contains a statement by BT’s president in opposition to a particular candidate for public office. No additional or incremental costs are incurred by BT in connection with inclusion of the president’s statement on the website. The communication related to the candidate would be considered a no-cost political communication, and would not constitute prohibited participation or intervention in a political campaign.
  12. Brighter Times (BT) is a 501(c)(3) public charity whose primary activities consist of providing educational information to the public regarding civil rights issues. BT maintains a robust, multi-dimensional website containing hundreds of pages as the primary means by which its educational information is disseminated. BT creates a sizable, special multiple-page section of its website that contains statements in opposition to certain candidates for public office. BT incurs incremental costs to design and post the special section. Such costs are not de minimis. BT’s activity of designing and posting the special section of its website is not a no-cost political communication, but rather would constitute prohibited participation or intervention in a political campaign. The expenditures for producing the special section would constitute political expenditures subject to the excise taxes under Section 4955 of the Internal Revenue Code.
  13. Cures for Disease (CD) is a 501(c)(3) public charity that seeks cures for particular diseases. CD’s activities consist of disease research and holding forums for sharing educational information about disease research. CD does not regularly or customarily run advertisements in newspapers. CD creates and runs ads in newspapers of general circulation the content of which relates exclusively to its endorsement of clearly and specifically identified candidates for public office. CD incurs costs to create and run the ads, and the costs are not de minimis. CD’s activity of creating and running the ads is not a no-cost political communication, but rather would constitute prohibited participation or intervention in a political campaign. The expenditures for creating and running the ads would constitute political expenditures subject to the excise taxes under Section 4955 of the Internal Revenue Code.
  14. Cures for Disease (CD) is a 501(c)(3) public charity that seeks cures for particular diseases. CD’s activities consist of disease research and holding forums for sharing educational information about disease research. CD regularly and customarily runs advertisements monthly in a few major magazines. The ads typically contain up-to-date descriptions of CD’s work and appeals for funds. Senator T is a candidate for election to the office of President of the United States who has been supportive of CD’s mission and work. In one of its regular monthly ads, CD dedicates a small portion of the ad to thanking Senator T for his support of CD’s mission and expressing support for Senator T in his upcoming election. CD incurs no incremental costs associated with including the expression of gratitude to Senator T in the ad. The inclusion of the communication related to Senator T in the ad would be considered a no-cost political communication and would not constitute prohibited participation or intervention in a political campaign.
 

1 461 U.S. 540, 551 (1983).
2 Id. at 545–46.
3 Grassley Staff Report, 56–57 (2011).
4 Rev. Rul. 2007-41, 2007-1 C.B. 1421, 1422.
5 H.R. Rep. No. 104-506, at 53, 59 n.15 (1996).
6 Treas. Reg. § 1.501(c)(3)-1(f)(1)(ii)–(iii).
7 See Ellen P. Aprill, Why the IRS Should Want to Develop Rules Regarding Charities and Politics, 62 Case W. Res. L. Rev. 643, 652 n.50 (2012).