Rolling Back the Political Activities Prohibition Will Unleash Tax-Deductible Dark Money


In response to news that House Ways & Means Chairman Kevin Brady offered an amendment, which passed on a party-line vote, that further weakens the long-standing federal law barring charities and churches from engaging in electoral politics, Campaign Legal Center (CLC) released the following statements:

Trevor Potter, CLC president and a former Republican chairman of the FEC said: 

“Rolling-back the longstanding prohibition on charitable political activity would broadly impact the entire charitable sector, and will undoubtedly lead to an array of new dark money activities, but now by charities and religious institutions.  

The charitable activities prohibition was passed without controversy in 1954 by a Republican Congress, signed by a Republican president, and has been supported and strengthened on a bipartisan basis by administrations of both political parties. And this is for good reason: donors to 501(c)(3) organizations are subsidized by taxpayers for their charitable, religious and educational work, not partisan political activity.
We know from the investigations and controversies of the last few years concerning 501(c)(4) dark money groups that the IRS has neither the interest nor capacity to police restrictions on the use of tax-exempt status for political purpose — and Congress will put political pressure on the IRS if they try. For that reason, giving 501(c)(3) organizations the ability to spend even a “de minimis” (or minimal) amount on political activity is a recipe for real disaster.”
Brendan Fischer, federal and FEC reform program director at CLC said: 

“This amendment is not about promoting religious liberty, it is about making dark money tax-deductible. Rolling back limitations on political activities by charities and churches could offer billionaire donors a way to not only influence elections anonymously, but also to get a charitable tax deduction for doing so.”

The political activities prohibition refers to language in the Internal Revenue Code that bars organizations that include religious entities, but also an array of other charities, from participating in or intervening in any political campaign on behalf of, or opposition to, any candidate for public office.

Read CLC’s white paper on the history of the political activities prohibition and the consequences of repealing it.