S. 1205: Free Speech Fairness Act

The Free Speech Fairness Act proposes changes to the Internal Revenue Code concerning how certain charitable organizations, specifically those classified under section 501(c)(3), can engage in political speech. Currently, 501(c)(3) organizations are prohibited from participating in political campaigns, which includes endorsing or opposing candidates for public office. This bill seeks to modify this rule.

Key Provisions of the Bill

• Political Speech Allowance: The bill states that 501(c)(3) organizations will not be considered to have participated in or intervened in a political campaign based solely on their statements if those statements are made in the ordinary course of their regular activities aimed at fulfilling their charitable purposes.
• De Minimis Expenses: It further specifies that as long as the statements do not result in substantial additional expenses for the organization (referred to as "de minimis incremental expenses"), the organization can make such statements without jeopardizing its tax-exempt status.

Impact of the Bill

The amendments are intended to provide greater freedom for charitable organizations to express views related to political candidates and campaigns while maintaining their focus on their primary charitable missions. This allows these organizations to more openly discuss political matters that intersect with their work without risking loss of their tax-exempt status provided they do so as part of their routine activities.

Implementation

If enacted, the changes would apply to taxable years ending after the date the bill is signed into law. This means that any statements made that comply with the provisions of the bill after its enactment would be protected under the new regulations.

Relevant Companies

None found