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Social Welfare Organizations: Public Input Sought for Tax Exemption Guidance

If you serve on certain volunteer or non-profit boards, the Treasury Department actually wants your opinion.

The IRS recently proposed new qualification requirements for “social welfare organizations” granted tax exempt status under section 501(c)(4) and it’s seeking your comments until Feb. 27.

Tax-exempt social welfare organizations, such as AARP, the NAACP, Crossroads GPS, and volunteer fire departments, may not engage in political activities that don’t promote social welfare. To determine whether organizations are in compliance, the IRS currently conducts fact-intensive inquiries, which are time-consuming for agents and organizations alike.

With the use of a new term – “candidate-related political activity” – and definitive rules, the IRS hopes to minimize the need for these “facts and circumstances” tests.

Candidate-related political activity includes communications that expressly advocate for a particular candidate or political party and expenditures that must be reported to the Federal Election Commission.

Grants and contributions to political organizations or tax-exempt organizations that conduct candidate-related political activities are prohibited, as are voter registration drives, distributing materials for candidates or political parties, and holding events featuring candidates close to election time. Such activities are deemed to be political rather than promoting social welfare.

Public input online is now encouraged and officials say they’ll consider all comments before issuing final rulings.

Of course, the professionals at Patrick & Robinson CPAs always consider your comments when meeting your tax or accounting needs.  Contact us at or 904-396-5400.

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