Internal Revenue Service officials released a report on the agency's examination of political activity by tax-exempt organizations during the 2004 election campaign.
In connection with the report, the agency also unveiled new procedures for the 2006 election season, providing additional guidance to charities regarding political activities.
The IRS began its review following an increase in complaints about political activities during the 2004 election cycle. Nearly three-quarters of 82 completed examinations found that the tax-exempt organizations had engaged in some level of prohibited political activity. Most of these exams concerned one-time, isolated occurrences of prohibited campaign activity, which the IRS addressed through written advisories to the organizations.
In a trio of cases -- all involving tax-exempt organizations that were not churches -- the prohibited activity was egregious enough to warrant the IRS proposing the revocation of the organizations' tax-exempt status.
Some of the specific instances of political intervention examined found charities, including churches, distributing printed materials encouraging members to vote for a particular candidate, endorsing or opposing a candidate on the Internet, or making cash contributions to a candidate's political campaign. All of the investigations resulted from specific referrals.
The report, available at www.irs.gov/charities/article/0,,id=154622,00.html , also outlines new procedures for the 2006 election period that will ensure that all referrals the IRS receives from the public are reviewed quickly. The agency also released a fact sheet providing detailed examples of unacceptable activities the IRS investigated during the 2004 election cycle.
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