Rev. Rul. 78-160

Advice has been requested whether the nonprofit organization described below, which otherwise qualifies for exemption from Federal income tax under section 501(c)(3) of the Internal Revenue Code of 1954, is operated exclusively for educational purposes.

The organization sent a questionnaire to all candidates for public office in an upcoming election. The questions were on topics that the organization deals with in its various educational, research, and publishing activities that are the basis for its exemption. To ensure that the voting public was fully informed about the candidates' views on these issues, the responses received were published without editorial comment in the organization's newsletter, which was distributed to numerous individuals and organizations on its membership list and to others on request.

Section 501(c)(3) of the Code provides for the exemption from Federal income tax of organizations that are organized and operated exclusively for educational purposes and that do not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office.

Section 1.501(c)(3)-1(c)(3)(i) of the Income Tax Regulations states that an organization is not operated exclusively for one or more exempt purposes if it is an "action" organization. Section 1.501(c)(3)-1(c)(3)(iii) defines an action organization as an organization which participates or intervenes, directly or indirectly, in any political campaign on behalf of or in opposition to any candidate for public office. Activities which constitute participation or intervention in a political campaign on behalf of or in opposition to a candidate include, but are not limited to, the publication or distribution of written statements or the making of oral statements on behalf of or in opposition to such a candidate.

Section 1.501(c)(3)-1(d)(3) of the regulations states that the term "educational," as used in section 501(c)(3) of the Code, relates to the instruction of the public on subjects useful to the individual and beneficial to the community.

The provisions of section 501(c)(3) of the Code that prohibit involvement in campaigns do not refer only to participation or intervention with a partisan motive, but to any participation or intervention which affects voter acceptance or rejection of a candidate. Notwithstanding the educational nature of the questionnaire activity, the organization's solicitation and publication of candidates' views on topics of concern to the organization can reasonably be expected to influence voters to accept or reject candidates.

Accordingly, under the circumstances described, the questionnaire activity is participation and intervention in a political campaign, and the organization is not operated exclusively for educational purposes within the meaning of section 501(c)(3) of the Code.

Compare Rev. Rul. 74-574, 1974-2 C.B. 160, which describes a religious and educational organization exempt under section 501(c)(3) of the Code that operates a noncommercial broadcasting station. The organization's compliance with the requirement of the Federal Communications Act of 1934, as amended, to provide a reasonable amount of free air time to political candidates on an equal basis was held not to be participation in political campaigns on behalf of candidates within the meaning of section 501(c)(3) of the Code.

Pursuant to the authority of section 7805(b) of the Code, the conclusion of this Revenue Ruling will not be applied before May 1, 1978, the date of its appearance in the Internal Revenue Bulletin, in the case of any section 501(c)(3) organization that had previously indicated in its Application for Exemption (Form 1023) that it would engage in the activity described in the Revenue Ruling.

¹ Revoked by Rev. Rul. 78-248, page 154, this Bulletin.