Editorial: New Rules For Nonprofits
The inconsistency between the restrictive "exclusive" in the Tax Code and the permissive "primarily" in the regulations must be addressed. It's time to eliminate the "primarily" standard.
Social welfare organizations should be prohibited from intervening in political campaigns, just like 501(c)(3) organizations. We believe this is a reasonable approach that will create more consistency in the Tax Code and regulations.
Such a change would not prohibit political activity. 501(c)(4) social services organizations could engage in activities for a nonexempt purpose, even if they are political activities, so long as those activities are insubstantial, just like 501(c)(3)'s.