ACLU Defends Nonprofit Free Speech

Political speech regulation remains an incredibly complex and contentious issue in our government, and there is plenty of legitimate concern about the recent influx of big, outside money in modern campaigns.

Those concerns, however, must be balanced against our crucial First Amendment rights to free speech and assembly. Hopefully we can all agree that any regulation to address "big money" must respect these values.

Late last year, the IRS proposed new political speech rules for certain nonprofits, which strike the wrong balance. Presumably an attempt to crack down on tax-exempt groups spending money to support or oppose candidates without disclosing their donors, the rules would likely do little to address that phenomenon and could seriously chill legitimate issue advocacy from nonprofits on the right and left, particularly smaller ones. We said as much in extensive comments submitted this week to the IRS.

Here's some background.

Although 501(c)(4) groups are meant to promote "social welfare" and community good, they can also engage in some partisan political activity so long as it's not their "primary" purpose. "Primary" is generally assumed to be 51 percent of their activities. So long as political activity is no more than 49 percent of their activities, 501(c)(4)s are exempt from taxation save only a few exceptions, including having to pay taxes on funds spent on those political activities.

While many see this exemption for groups engaged in partisan politicking as sinister, it also provides significant benefits for legitimate social welfare groups like the ACLU, which engages in extensive issue advocacy while completely forswearing any electioneering.

Unfortunately, under the also less-than-ideal current rules, the IRS has complete discretion to determine both what constitutes partisan activity, and how much such activity makes it a group's "primary" purpose. Historically, this kind of discretion has led to complications for issue advocacy groups, where communications critical of a sitting public official's position on a matter of public policy have been called "sham" issue ads. In the 1970s, for instance, the ACLU had to sue to run an ad in The New York Times critical of President Nixon's opposition to school desegregation.

And, it is that very discretion that led to what the IRS inspector general called the use of "inappropriate criteria" in the selection of groups for undue scrutiny late last year (note, importantly, that the IG didn't find any political motivation behind the scrutiny). So, for many moons now, this subjectivity has led tax practitioners and activists to ask the IRS to write a bright-line rule to clear up the confusion.

The proposed rules rightly lay out a bright-line, but one that cuts in exactly the wrong direction. They would now also count as partisan political activity a vast amount of public policy advocacy that has absolutely nothing to do with partisan politicking. In other words, under the proposed rules, the IRS could find that the primary purpose of totally nonpartisan groups is electioneering.

The new rules would, for instance, count as political activity any communication that simply mentions a candidate 60 days before an election or 30 days before a primary. Furthermore, any sharply worded communication that the IRS could construe as support or opposition to a candidate (e.g. "call Senator Doe and urge her to finally do the right thing on the deficit"), regardless of whether there's an election coming, would also count as political activity. The rules would also count against a group's permissible allotment of political activity completely nonpartisan voter education, registration, and mobilization efforts.

The proposed rules could pose a significant chilling effect on issue advocacy engaged in by many nonprofits. They would also disproportionately affect small, poor nonprofits that cannot afford the legal counsel to guarantee compliance with the new rules.

We fear that faced with such uncertainty, and needing to maintain their (c)(4) status, they would opt to just keep their mouths closed, so to speak. The rules also would fail to stop the groups they were meant to crack down on, as they would still be able to engage in a certain amount of actual partisan electioneering without disclosing their members.

The proposed rules thus create the worst of all worlds.

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Vicki B.

"Big money" from corporations, which magically became PEOPLE in 2010 after the Supreme Court decided it would be that way, has NOTHING to do with nonprofit.
The Koch brothers would faint dead AWAY if you said anything they do is 501(c) and their corporation is trying to kill everyone in West Virginia and for 200 miles down the river - which HAPPENS TO BE the city I LIVE in; and when it's not POISONED, drink WATER in.

Corporations have never been nonprofit, and I don't believe that one family should control the entire election. I think what Bernie Sanders said applies in this situation. He said that when one family can control the outcome of an election it's time to add an amendment to the constitution to prevent it from happening. He believes in a country of the PEOPLE not just one family.
I think those brothers are Fascists and have never been Republican, which is why nobody in my all-Republican family except my dad even likes them.
My brother, who will be loyal and defend every stupid thing Bush Junior ever did, said he DISlikes the Tea Party.
That's pretty bad when someone who doesn't care if a politician authorized torture still dislikes the Tea Party.

After they found that CHHM in our water, the Koch brothers became my enemy. It's PERSONAL now and I won't forgive them unless they admit that their industries were wrong to poison the water.


I misunderstood this article the first time I read it. I guess that's what I get for reading something while I'm getting ready to go to work.

But I still think the Koch brothers with their "corporations are people" nonsense are way more dangerous and malicious than any nonprofit organization.


This is unbelievable, I read the whole thing and hope the rest of you do too; the 1% appears to have control of the IRS. Here is my response to the IRS, please share it with EVERYONE>>We are losing our country>I sent in a general comment earlier. After reading your entire proposal I felt I needed to comment further. Making specific activities candidate-related political activities by definition, especially, organizations that "get out the vote" or "hold registration drives" sounds like a blatantly politically motivated proposal, The automatic 60 and 30 day rule sounds like a promotion of the mushroom theory of government "keep them in the dark and spread BS on them". Most people don't even start thinking about whom to support or vote for until near the election. We the people need to be informed on the positions of the candidates. Material of any kind or at any time is necessary for the public to know what candidates, support what positions. Sending out material stating that this candidate is pro choice, and pro gun, etc is the kind of information the voters NEED. Preparation and distribution of a voter guide and accompanying material that refers to candidates or a political parties and their positions are EDUCATION and the organization that supplies it should be tax exempt. Having candidates come speak to your organization would be educational as long as all candidates are invited to speak. As I said in my earlier response; ALL statements made about a candidate, or sitting congressman would have to be backed up by hard data. It seems that you are using the approach that it is hard to tell who is lying as the reason for proposing what seems to me to be politically motivated changes. "potential mitigating or aggravating circumstances in particular cases (such as whether an issue-oriented communication is “neutral” or “biased” with respect to a candidate" is difficult to determine. "The analysis reflected in these revenue rulings for determining whether an organization has engaged in political campaign intervention, or has expended funds for a section 527 exempt function, is fact-intensive." Again every statement made about a candidate must be backed up by easily view-able hard data to be considered EDUCATION. Just looking at what is being proposed; I find it hard to believe the proposals are not politically motivated. The courts are now arms of the political parties; is the IRS going the same way?

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