The Treasury Inspector General for Tax Administration (TIGTA) has released an audit report addressing improvements in educating and enforcing the prohibition against political activities for tax-exempt organizations. The purpose of the audit was to determine the effectiveness of the Internal Revenue Service's (IRS) Political Activities Compliance Initiative (the Initiative). The audit addressed how effective the IRS is in addressing alleged incidences of political campaign intervention and "whether actions had detected repeated campaign intervention by previously identified organizations."

The audit found that the Initiative could be improved "to ensure that tax-exempt organizations receive timely notification that they might be involved in prohibited political activity. Also, the EO function needs to clarify why certain referrals are not included in the Initiative."

Recommendations laid out in the audit include :

• ensure that all referrals of potentially prohibited political intervention are reviewed in a timely manner.
• Improve the consistent understanding of prohibited political intervention criteria.

The IRS expects an active 2008 election cycle, and will start the Initiative even earlier this year. To read the full report, click here.

In June of last year, Americans United for Separation of Church and State (AU) requested that the Internal Revenue Service (IRS) investigate Bill Keller for possibly violating the political campaign intervention prohibition for tax exempt organizations. Keller has a call-in show on a Tampa television station and a Web site called Liveprayer.com. On May 11, 2007 Keller warned listeners; "if you vote for Mitt Romney, you are voting for Satan!" Now, the public is aware that the IRS is in fact investigating the case. According to the St. Petersburg Times, "the IRS gave him a week to assemble documents and videos of his television programs. . . Keller said he is prepared to fight if his ministry loses its tax-exempt status."

The Chronicle of Philanthropy ($$) has an interesting article on how nonprofits are utilizing the excitement of this election season.

As the November 4 presidential election draws nearer, Maria Rodriguez, executive director of the Florida Immigrant Coalition, has her eye on the calendar. Her organization is conducting its first voter-mobilization project and hopes to sign up 4,300 new Haitian, Latino, and community-college student voters and get 9,000 members of those groups to the polls. The coalition is one of many charities and foundations that are seeking to tap into unusually strong voter enthusiasm this year to recruit new foot soldiers in the fight for social causes both locally and nationally.

If you want your organization to get involved in the election, check out this free webinar from NonprofitVote.org. The webinar training on how to develop an effective plan for your organization's nonpartisan voter outreach activities, "Making a 2008 Voter Engagement Plan for Your Nonprofit," will be held on Thursday June 26 2:00-3:00pm EST. Topics will include how to integrate voter engagement work into daily activities, and the dos and don'ts of nonpartisan voter engagement. Sign up here.

By unanimous consent, the Senate finally approved five members of the Federal Election Commission (FEC). After the new members are sworn in, the agency will be back to full working order, and should be very busy. CQ Politics reports; "After months of squabbling over new members for the Federal Election Commission, the Senate confirmed five new officials Tuesday with little fanfare, putting the long-defunct commission back in working order. . . . Priorities for the group include new disclosure rules for lobbyists who bundle campaign contributions, requests for matching funds, and certifying public funds for the general election, said FEC spokesman Bob Biersack."

The current issue of the Chronicle of Philanthropy ($$) has an opinion piece titled " How to Guarantee Respect for Public-Interest Lobbyists." It addresses some of the negative consequences of the growing disdain towards lobbyists that has led to the presidential candidates' public purge of any such connections. In response, "to restore public faith in democracy, nonprofit groups need to do even more lobbying and advocacy. While it is critical to clamp down on unethical lobbying, nothing should be done to dampen interest in advocacy by the nation's more than one million charities." A proposed set of ethical principles to guide public interest lobbying is laid out in the article.

• Public-interest lobbying must add civic value.
• Public-interest lobbying must be inclusive, engaging the community, particularly those most affected by the public policy being advocated.
• Smart and ethical lobbying must be credible, and must follow all laws and regulations.

Although we do not fit into stereotypes, public-interest lobbyists are making a tremendous difference across this country every day against all odds. However, only if policy makers hear far more of America's voices can they govern in accord with what the people need. Lobbying is not only a constitutional right, but also a moral responsibility of nonprofit groups to improve the quality of life. So lobbying always needs to be a key part of nonprofit activities and one that we do with impeccable attention to ethics and the law.

The opinion piece was written by David Cohen, a senior fellow at Civic Ventures and Council for a Livable World, and Larry Ottinger, president of the Center for Lobbying in the Public Interest.

The National Association of Manufacturers' (NAM) challenge to a new member disclosure law was dismissed on April 11, followed by both the U.S. Court of Appeals and the U.S. Supreme Court refusing to grant a stay pending appeal. Now, the U.S. Court of Appeals for the District of Columbia Circuit has scheduled an oral argument for Sept. 12 with a decision expected weeks or months after the argument date.

NAM is appealing the lower court's decision that upheld disclosure provisions in the Honest Leadership and Open Government Act (HLOGA) that require coalitions and associations to reveal organizations that contribute at least $5,000 per quarter and actively participates in the lobbying campaigns. NAM charges that the member and affiliate provision is too vague, violating First Amendment rights of free association. The judge in April found that the provision was in fact narrowly defined.

According to an Alternet article, an attorney for the Department of Veterans Affairs (VA), "told a federal appeals court Thursday that the VA could not conceive of any circumstance where voter registration drives could occur at its facilities." For the most part the atrocious decision to ban registration drives at VA facilities has largely been absent from major newspapers, but the New York Times has now covered the recent federal appeals court hearing.

An appeals court this week (June 12) considered whether restrictions on voter registration drives at the VA's campus in Menlo Park, CA are unconstitutional. The court is revisiting the question of whether Steve Preminger, chair of the Santa Clara County Democratic Central Committee has standing to question the constitutionality of the VA's policy.

According to the Alternet article, Owen Martikan, assistant U.S. attorney representing the VA said "voter registration drives would interfere with patient medical care and also violate the federal Hatch Act, which limits federal employees from participating in political campaign activities." However, veterans are not federal employees.

In May, the department took the broader step of issuing a ban on all outside groups from registration drives on its properties. Scott Rafferty, a lawyer representing Preminger, said "Just because veterans live on these campuses does not mean they should be deprived of the rights of free association and free speech."

The American Bar Association Section of Taxation recommended guidance to be included in the 2008-2009 Treasury Department Internal Revenue Service (IRS) guidance priority list. The section asked for guidance in a range of practice areas including exempt organizations. Among many other recommendations, the request included guidance on "acceptable methods for determining whether an organization is conducting political activities (including both candidate campaign intervention and improper private benefit to partisan interests) as its primary activity (consistent with section 527 exemption), or as a less-than-primary activity (consistent with non-charitable section 501(c) exemption)."

OMB Watch filed comments on IRS guidance priorities urging the creation of a bright line definition of partisan intervention in elections.

The Congressional Management Foundation (CMF) has released a very interesting new study titled, "Communicating with Congress How the Internet Has Changed Citizen Engagement." It reports on the results of survey research with over 10,000 citizens about their correspondence with Congress. A CMF press release highlights that nearly 100 million adult Americans contacted Congress in the last five years. With consequences for citizens, Congress, and advocacy organizations, the study provides a lot of valuable information. For example, the study found that "organizers of grassroots advocacy campaigns, and the groups and causes for whom they work, play the role of trusted educators and facilitators of communications between citizens and Members of Congress. They are part of something bigger than a one-time advocacy campaign, and they should understand and respect their role in the democratic dialogue."

The Internal Revenue Service (IRS) held a phone forum on the role tax exempt organizations can play in the electoral process, addressing issues of political activity, lobbying and issue advocacy. 501(c)(3) organizations can educate voters, register voters, and encourage higher voter turnout, as long as the activity is carried out in an unbiased way. According to BNA Money and Politics ($$), the IRS is concentrating on issue advocacy because it is increasingly finding situations that are not covered under the precedential guidance in Revenue Ruling 2007-41.

Overall, the types of alleged prohibited political activity IRS has seen since it began its political activity program to follow up on referrals of misconduct in 2004 include: organizations distributing diverse materials encouraging people to vote for candidates, religious leaders using the pulpit to endorse or oppose particular candidates, candidates speaking in their roles as candidates at officials functions of exempt organizations, organizations placing signs on their properties showing support for particular candidates, organizations disseminating improper voter guides or candidate ratings, organizations criticizing or supporting candidates on the their Web sites or through links to another Webs site, organizations officially verbally endorsing candidates, and organizations making cash contributions to a candidate's political campaign.

Due to the Honest Leadership and Open Government Act of 2007, which amends the Lobbying Disclosure Act of 1995 (LDA), new guidance information has been issued. Section 5 of the LDA was amended by mandating an additional filing requirement, Form LD-203, to be filed semiannually by July 30th and January 30th. Information to be reported on new Form LD-203 includes certain contributions to political campaigns, honorary contributions, presidential library contributions, and payments for event costs. In addition, the filer must certify that they read and understand the Rules of the House and Senate relating to gifts and travel and has not provided, requested, or directed a gift with knowledge that it would violate either House or Senate Rules.

Senate guidance is available here and House guidance here.