Question: Did the Church of Jesus Christ of Latter-day Saints (the Mormons) violate its tax-exempt status by participating in the "Yes on 8" campaign?

Table of Contents

Question: Did the Church of Jesus Christ of Latter-day Saints (the Mormons) violate its tax-exempt status by participating in the "Yes on 8" campaign?

The church did not participate in or intervene in any of the political campaigns for any of the candidates running in the 2008 election. The IRS does, however, permit a Church to take positions on issues

22million.jpg

From the Internal Revenue Service:

Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office…Political campaign intervention includes any and all activities that favor or oppose one or more candidates for public office.

The church did not participate in or intervene in any of the political campaigns for any of the candidates running in the 2008 election. The IRS does, however, permit a Church to take positions on issues:

Under federal tax law, section 501(c)(3) organizations may take positions on public policy issues, including issues that divide candidates in an election for public office. [1]

According to Barry Lynn, executive director of "Americans United for the Separation of Church and State" (and who, for the record, was "outraged by the Prop. 8 victory"):

"They almost certainly have not violated their tax exemption...While the tax code has a zero tolerance for endorsements of candidates, the tax code gives wide latitude for churches to engage in discussions of policy matters and moral questions, including when posed as initiatives." [2]

Nonprofit 501c(3) organizations are prohibited from spending more than 20 percent of their budgets on political activities. "The 20 percent threshold means that the Catholic or Mormon churches, whose organizations span the globe, would have had to spend hundreds of millions of dollars—if not billions—to violate their tax-exempt status." [3]

But what about the companies that the Church owns?

Some companies that are owned by the Church, such as Bonneville Communications, are in business to make profit. These businesses pay their taxes just like any other business: They are not part of the tax-exempt portion of the Church.

There is no evidence that any Church owned for-profit companies made contributions to the Yes on 8 campaign or any supporting organization.


Notes

  1. Election Year Activities and the Prohibition on Political Campaign Intervention for Section 501(c)(3) Organizations, Internal Revenue Service
  2. Matthai Kuruvila, Tax-exempt benefit disputed in Prop. 8 campaign, SFGate (Nov. 28, 2008)
  3. Matthai Kuruvila, Tax-exempt benefit disputed in Prop. 8 campaign, SFGate (Nov. 28, 2008)