Can a section 501(c)(3) organization state its position on public policy issues that candidates for public office are divided on

Yes, a section 501(c)(3) organization can state its position on public policy issues that candidates for public office are divided on, as long as the message does not in any way favor or oppose a candidate.

The legal reasoning behind this is rooted in the prohibition against political campaign intervention for 501(c)(3) organizations, as outlined in the Internal Revenue Code and various IRS rulings. Section 501(c)(3) organizations are prohibited from participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office. This includes making statements that could be interpreted as favoring or opposing a candidate.

However, organizations are allowed to take positions on public policy issues, even if those issues are ones that divide candidates in an election. The key is that the organization's communication must not show any bias or preference for or against any candidate. This means that the message should not identify a candidate by name, show a picture of a candidate, refer to a candidate’s political party affiliations, or contain other distinctive features of a candidate’s platform or biography.

The IRS considers several factors to determine whether a communication constitutes prohibited political campaign intervention:

• Whether the statement identifies one or more candidates for a given public office.
• Whether the statement expresses approval or disapproval for one or more candidates' positions and/or actions.
• Whether the statement is delivered close in time to the election.
• Whether the statement makes reference to voting or an election.
• Whether the issue addressed in the communication has been raised as an issue distinguishing candidates for a given office.
• Whether the communication is part of an ongoing series of communications by the organization on the same issue that are made independent of the timing of any election.
• Whether the timing of the communication and identification of the candidate are related to a non-electoral event such as a scheduled vote on specific legislation by an officeholder who also happens to be a candidate for public office.

For example, in Rev. Rul. 2007-41, the IRS provided guidance on various scenarios where organizations engaged in activities that could be considered political campaign intervention. The ruling emphasized that all facts and circumstances must be considered to determine whether an organization's activities constitute prohibited political campaign intervention.

In summary, while a 501(c)(3) organization can discuss public policy issues, it must do so in a way that does not favor or oppose any candidate for public office to avoid jeopardizing its tax-exempt status.

Sources:
Rev. Rul. 2007-41
Publication 1828 (8/2015)
§ 501. Exemption from tax on corporations, certain trusts, etc.
Publication 4221-PC (3/2018)
TAM 200908050
Rev. Rul. 86-95