The Commission on Presidential Debates (CPD) may be breaking federal tax laws by claiming 501(c)(3) tax status while favoring candidates preferred by the two major political parties. It is possible for a nonprofit to have a political agenda legally, but the privileged 501(c)(3) tax status is reserved for charitable and education nonprofits. It is a special tax status that implies that the CPD should educate in a nonpartisan manner.
Interestingly, many commentators and voters conflate “nonpartisanship” with “bipartisanship.” Nonpartisanship allows for a broad range of political philosophies and policy stances to be represented. However, bipartisan representation of candidates fails to include anti-establishment voices who are not networked within the Republican and Democratic parties.
Granted, it would be inconvenient for the CPD to allow the entire slate of candidates for president to debate on a single stage, even in a series of debates. Technically, 1,862 candidates filed to run for president with the Federal Election Commission (FEC).
Further, federal law does not require debate sponsors to include all candidates if there is no practical way to do so. It does, however, require unbiased and objective criteria for debate entry in order to qualify as a 501(c)(3) educational nonprofit.
The CPD claims to have unbiased criteria for candidates by demanding that candidates meet a high polling threshold to be considered for debates in addition to being qualified to run on enough state ballots to have a mathematical shot at winning an electoral majority.
However, third party and independent candidates have been generally excluded from polls and virtually all media coverage. Favorable poll numbers are connected to name recognition among Americans who watch and read news from major outlets, which is still a majority of the voting population.
Federal courts have ruled that the IRS should not allow educational or charitable tax status simply because there was no explicit intention to take specific political action. Intent was ruled irrelevant. This means that even if the CPD claims there is no clear evidence that it is working to maintain a two-party system, it could still be found guilty of political activity.
The courts have never ruled that bipartisan political activity fails to be nonpartisan with their interpretations of nonprofit tax laws. The courts would have to rule against the CPD by plaintiffs challenging the CPD’s tax status.
Further, according to current legal precedent, citizens cannot demand removal of a 501(c)(3) nonprofit’s tax status by claiming they are cheated as taxpayers or citizens. Presidential candidates banned from the debates are among the few plaintiffs legally qualified to take the CPD to court over their tax status.
There are a couple of other possible legal arguments against the CPD maintaining its tax status. It is illegal to endorse candidates. It may qualify as implied and illegal endorsement of candidates to include only certain candidates. The courts have not ruled on this particular argument based in vague tax laws.
It is also illegal to support candidates with financial support. Though it might be trickier to make the argument in court, media coverage that equates to millions in free ad time during presidential debates directly benefits the campaigns allowed on the debate stage.
If the CPD loses its tax status, it would permanently lose the opportunity to file for 501(c)(4), or alternative political nonprofit tax statuses. The CPD would be forced to change its policies to qualify for regaining educational nonprofit status after a year or fold completely.
However, since presidential debates sponsored by the CPD only occur every four years, a year of losing nonprofit tax status would likely go unnoticed.
The Green and Libertarian parties are currently suing the CPD, along with the nonpartisan organization, Level the Playing Field, for exclusion from debates. They are not challenging the CPD's tax status at this time. Perhaps this could emerge as a future legal argument to take down the CPD and broaden the national conversation during presidential debates.
Author’s Note: Legal expertise was provided by the volume, “Tax Issues of Religious Organizations/by Nina J. Crimm and Frank H. Granito.” This legal reference includes tax issues of religious groups and their tax status, which happens to be the same status issued to educational organizations.