## Facts

- The IRS considered whether certain § 501(c)(3) organizations conducting “voter education” would be treated as “action” organizations due to political campaign intervention under IRC § 501(c)(3) and Treas. Reg. § 1.501(c)(3)-1(c)(3).
- Four hypothetical organizations were described:
  - Organization A annually published voting records of all Members of Congress on major legislative issues across a wide range of subjects, without editorial opinion or structural cues implying approval/disapproval.
  - Organization B sent a questionnaire to all candidates for governor covering a wide range of issues chosen based on general public interest and distributed candidates’ responses in a neutral voter guide.
  - Organization C similarly used a questionnaire and voter guide, but selected and framed questions to reflect the organization’s views on a particular issue, indicating issue-based bias.
  - Organization D distributed a voter guide during election campaigns reporting incumbents’ voting records only on land-conservation issues central to the organization’s agenda.
- The ruling revoked a prior IRS position stated in Rev. Rul. 78-160.

## Issues

1. When do “voter education” activities by an otherwise qualifying § 501(c)(3) organization constitute prohibited political campaign intervention under IRC § 501(c)(3) and Treas. Reg. § 1.501(c)(3)-1(c)(3)?
2. Under what circumstances do voting-record publications, candidate questionnaires, and voter guides cause an organization to be treated as an “action” organization and therefore not exempt under § 501(c)(3)?

## Decision

- The IRS applied a facts-and-circumstances approach to determine whether the activities constituted direct or indirect campaign intervention.
- Situation 1 (Organization A): Not prohibited political campaign activity; the broad, noneditorial compilation did not imply approval or disapproval.
- Situation 2 (Organization B): Not prohibited political campaign activity; the questionnaire and guide were broad, sent to all candidates, and presented neutrally.
- Situation 3 (Organization C): Prohibited political campaign intervention; biased issue selection and framing effectively favored candidates aligned with the organization’s views.
- Situation 4 (Organization D): Prohibited political campaign intervention; a single-issue, incumbent-focused guide distributed during campaigns had the effect of favoring or opposing candidates.
- Rev. Rul. 78-160 was revoked.

## Legal Principles

- A § 501(c)(3) organization may not “participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”
- Under Treas. Reg. § 1.501(c)(3)-1(c)(3), an organization is not operated exclusively for exempt purposes if it is an “action” organization, including one that participates or intervenes in political campaigns directly or indirectly.
- Whether voter education constitutes campaign intervention depends on all facts and circumstances, including:
  - Breadth of issues covered (broad vs. narrow/single issue).
  - Neutrality of content and structure (absence vs. presence of cues implying approval/disapproval).
  - Selection and framing of questions (public-interest based vs. reflecting organizational views).
  - Candidate coverage (all candidates vs. selective coverage such as incumbents only).
  - Timing and distribution (routine civic education vs. concentrated dissemination during an election campaign).
- Nonpartisan voter education can be permissible, but materials that show bias or have the effect of favoring or opposing candidates constitute prohibited campaign intervention even without express endorsement.

## Conclusion

Rev. Rul. 78-248 distinguishes permissible nonpartisan voter education from prohibited campaign intervention for § 501(c)(3) organizations, allowing broadly framed, neutrally presented voter guides and questionnaires while treating biased or single-issue, election-timed materials as political activity that can jeopardize exemption.


Rev. Rul. 78-248, 1978-1 C.B. 154 (1978)