Related Practices
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Covington’s Election & Political Law expertise extends to tax-exempt and not-for-profit organizations. Our experience includes advising on issues arising from the complex interplay between applicable Federal Election Commission (FEC) rules and the different, and evolving, tax rules under the Internal Revenue Code. Our clients include Section 527 political action committees (PACs), as well as other tax-exempt and not-for-profit entities that desire to participate in the federal, state or local electoral process.
Covington regularly advises Section 527 political organizations and other tax-exempt and not-for-profit organizations -- as well as individual directors, officers and fiduciaries -- in a wide variety of sophisticated tax matters specific to entities participating in the electoral process. Our work in this area includes both advising on the creation and operation of such organizations to ensure they are in compliance with the applicable laws and representing clients before the Internal Revenue Service. We have particular expertise in issues relating to the ability of 501(c)(4) social welfare organizations and 501(c)(6) trade associations to engage in permissible election activities, and in issues relating to affiliations among tax-exempt entities, such as affiliated groups consisting of 501(c)(3) charitable, social welfare and Section 527 organizations. We also regularly counsel clients on the restrictions on legislative activities, public disclosure requirements, the unrelated business income tax and the income tax imposed on 501(c) organizations that engage in taxable political activities.
Representative Matters
- We have advised prominent non-profit educational and arts organizations concerning their political and lobbying activities with respect to potential risks to their tax-exemption in connection with the proposed formation of Section 527 political organizations.
- We advised a potential Presidential candidate on the pros and cons of forming one or more tax-exempt entities to promote public policy objectives in the run-up to the election.
- We advised the board of trustees of a nationally recognized charitable organization with respect to the possible effects on the organization’s tax-exemption of the perceived candidacy of the organization’s president in a federal election.
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