Last week, Gina M. Lavarda of Iowa published a new report titled “Nonprofits: Are You at Risk of Losing Your Tax-Exempt Status?” Check out the following clip of her abstract courtesy of the Tax Prof. Alternatively, you can download a PDF of the full report by clicking here.
In 2004, the IRS studied 110 § 501(c)(3) organizations and found that seventy-five percent of them had violated federal tax law by engaging in political-campaign activities during the 2004 campaign period. The IRS learned that many of these organizations did not understand the broad scope of the political-campaign prohibition and that organizations’ leaders mistakenly spoke on behalf of their organizations rather than in their personal capacities separate from their organizations. Following the study, the IRS stated that any § 501(c)(3) organization that did not comply with federal tax law’s statutory requirements and restrictions risked losing its tax-exempt status.