Question

A Community Hospital hosted a public meeting in which the local State Representative, running for reelection, the candidate discussed state and legislative matters and forecasted the outcome of the Fall election. His political opponent filed a complaint with the IRS and stated that Hospital had violated its tax-exempt status. What would be your decision as to whether or not the hospital violated its tax-exempt status? Be specific as to the ruling and document what portion of the rule/regulation was violated, if any.

Answer 1

ANSWER-: Yes, Community Hospital violated it's tax-exempt status under IRS 501 (c) (3)

REASON:

In order to maintain tax-exempt status 501(c)(3)- non profit organizations cannot engage in political campaigning Federal Tax law is very strict on issue of political campaigning,and if a non profit organizations engage in political campaigning ,then IRS charges 5% excise tax as penalty on that organizations.

Some activites that IRS has found to violate the prohibition on political campaigning include:-

1- Inviting a political candidate to make a campaign speech at an event hosted by the organization.

2-Donating money from organization to political candidate .

3- Supporting or criticizing a candidate on the organizations website.