IRS and Your Politically Controversial Speakers, The

Academe, Sep/Oct 2007 by Heen, Mary L

Don't be so cautious about who you invite to campus for fear of endangering your nonprofit status. You needn't shy away from politically controversial speakers.

During the 2008 election cycle, we can expect an upsurge of incidents in which college and university administrators rescind legitimate invitations to politically controversial speakers. As Academic Freedom and Outside Speakers, a statement issued by the AAUP's Committee A on Academic Freedom and Tenure, affirms, "Because academic freedom requires the liberty to learn as well as to teach, colleges and universities should respect the prerogatives of campus organizations to select outside speakers they wish to hear." (The statement begins on page 62.)

In the past, administrators have sometimes cited the lack of balance represented by the invitation of a college or university group or the danger that a group's invitation might violate section 501 (c) (3) of the Internal Revenue Code as reasons for canceling or modifying otherwise legitimate invitations. In Academic Freedom and Outside Speakers, Committee A expresses a concern that overly restrictive interpretations of section 501(c)(3) have become an excuse for preventing campus groups from inviting controversial speakers. Developments during the past two years reinforce that concern for the upcoming election season.

Increased enforcement efforts initiated by the federal government combined with the lack of clear rules in this area may lead college and university administrators to apply overly restrictive interpretations of the tax rules. Special danger is posed when administrators face strong objections by powerful constituencies offended by the views of an outside speaker.

Without a firm commitment to the academic freedom principles at stake, administrators may respond to public pressures or government compliance initiatives in ways that undermine the fundamental educational values of an open campus. Academic Freedom and Outside Speakers suggests several broad principles to guide college and university communities in applying the tax rules to institutions of higher education.

Academic Freedom at Stake

Section 501(c)(3) provides that an organization may qualify for tax exemption only if it "does 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 the regulations, activities constituting participation or intervention in a political campaign "include, but are not limited to, the publication or distribution of written or printed statements or the making of oral statements on behalf of or in opposition to such a candidate."

Unlike lobbying, in which charities may engage as long as the lobbying activities are not substantial, the prohibition against intervention or participation in a political campaign (the "political prohibition") is absolute. The consequences to an organization for violating the prohibition range from retroactive revocation of taxexempt status to an excise tax on amounts spent on the prohibited intervention. In 1995, for the first time in its history, the Internal Revenue Service (IRS) revoked the tax-exempt status of a bona fide church because of its involvement in politics. Branch Ministries, which operated a Christian church located in Binghamton, New York, purchased two newspaper ads four days before the 1992 presidential election. The ads contained an open letter signed by the church and its pastor, titled "Christians Beware," which urged Christians not to vote for then-candidate Bill Clinton because of his position on moral issues. Fine print at the bottom of the ad invited "tax-deductible charitable contributions for this advertisement" along with the request that donations be made to the church. Alerted to the ads by newspaper reports and opinion columns, the 1RS initiated an investigation and found an egregious violation of the political prohibition. In 2000, the United States Court of Appeals for the D. C. Circuit upheld the revocation by the 1RS of Branch Ministries' tax exemption under section 501(c)(3) retroactive to 1992, and rejected the argument of the church and its pastor that the revocation unconstitutionally violated their rights to free speech and to free exercise of their religion guaranteed by the First Amendment. The extreme range in severity of possible sanctions for prohibited activity, from loss of the organization's charitable status to a minimal amount of tax due, poses both compliance and enforcement dilemmas.

In the college and university setting, three key principles of academic freedom should guide administrators in complying with the applicable federal tax rules without undermining fundamental educational values. First, the political prohibition of section 501(c)(3) should be interpreted in light of the educational mission of the college or university. Because the mission of colleges and universities includes creating and transmitting new knowledge, the university community's right to hear ideas and to test them under standards of the academic profession goes to the heart of academic freedom. As part of their educational missions, many colleges and universities also seek to foster the development of mature independence of mind in their students by authorizing them to organize to invite outside speakers as a means of pursuing extracurricular interests. In so doing, institutions recognize and sustain an important element of academic freedom as a necessary condition for achievement of their educational objectives.