CASE STUDY 2
Lobbying and Political Campaign Activity case study
Tax-exempt organizations also known as a section 501 (c)(3) organizations are
institutions which are exempted from paying federal tax. These organizations must meet the
requirements in the 501 (c) of the Internal Revenue Code and file Form 1023 or 1024 as the first
step in applying for Federal tax-exempt. Tax-exempt institutions include charitable
organizations, social welfare, labor and agriculture, charity, business leagues, veteran, employee
association, political, and social clubs organizations. Tax-exempt organizations operate under
strict rules put in place by the state, and when violated, there are consequences to the
organization. This paper will look at six case studies of tax-exempt organizations and decide
whether they violet the set rules or not.
In the first case study, section 501 (c)(3) organization that supports community
participation violates the rule relating to the political campaign. Siegel (2006) mentions that tax-
exempt agencies are not allowed to participate in political activities of any kind. By putting up a
booth for voters to register and choose their affiliate parties, they are engaging in a political
campaign. Even though the names of candidates involved in the elections are not given, where
there are voter registration activities and party affiliation there is political activity. The
organization is therefore guilty of breaking the rule.
A church which is a member of section 501 (c) (3) in the second case study violates the
rule relating to political campaign when Minister C states that candidate V should be re-elected.
According to tax-exempt organization rules, when any person who is an affiliate or an equivalent
to the manager of such organization participates in any act which is against the stipulated rules
then it is viewed that the organization itself has done the act(Hopkins, 2011). Therefore, Minister
C of church L makes the church guilty of the offense even if he does not say that he is speaking
on behalf of the church.
In the third case study which involves minister F of church O which is a tax-exempt
organization, the organization is guilty of lobbying for Candidate X from its members.
According to Nix (1978), tax-exempt organizations are not allowed to lobby for any political
candidate. The organization has violated the rules of section 501 (c) (3) since its representative
who is minister indirectly took part in lobbying which is not allowed to be done by such
organization. This is evident from the fact that the minister does not invite any other candidate to
the church to the campaign.
Symphony S has violated the rule of the campaign according to a section 501 (c)
(3)which does not allow such organizations to advocate for any candidate election (Caron &
Dessingue, 1985).Chairman of S’ board openly asks the public in City park to reelect Major G.
According to Eliasberg (1965), tax-exempt organizations are not allowed to participate in
any activity that benefits an individual. Since Museum K which is a section of 501 (c) (3)
organization permitted Candidate P to hold fund-raising in its hall, it is guilty of violating the
stipulated rule.
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