REGAN v. TAXATION WITH REPRESENTATION OF WASHINGTON

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Case Basics
Docket No. 
81-2338
Appellant 
Donald Regan, Secretary of the Treasury
Appellee 
Taxation With Representation of Washington
Consolidation 
No. 82-134, Taxation With Representation of Washington v. Regan, Secretary of the Treasury, et al.
Advocates
(Solicitor General, Department of Justice, argued the cause for the appellants in No. 81-2338)
(argued the cause for the appellee in No. 81-2338)
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Facts of the Case 

Two non-profit groups merged to form the group Taxation With Representation of Washington (TWR). One of the original groups obtained 501(c)3 status from the Internal Revenue Service (IRS), which allowed donors to make tax-deductible donations to it. Because the other group participated in political lobbying, it did not qualify for 501(C)(3) status and could not offer tax-deductible donations. Since the newly formed TWR also participated in "substantial lobbying," the IRS denied it tax-deduction privileges. TWR alleged in District Court that the IRS's "substantial lobbying" restriction for 501(C)(3) status violated its First Amendment rights by imposing an "unconstitutional burden" on its ability to receive tax-deductible donations. TWR also argued that the restriction violated its Fifth Amendment equal protection rights since veterans' organizations that lobbied extensively could receive tax-deductible donations. The District Court dismissed the complaint but the Court of Appeals for the District of Columbia ruled that the "substantial lobbying" restriction did impair TWR's Fifth Amendment equal protection rights.

Question 

Does the IRS violate the First Amendment by denying 501(c)3 tax-deduction privileges to non-profit groups that participate in "substantial lobbying"? Does the IRS violate the equal protection component of the Fifth Amendment by denying 501(c)3 tax-deduction privileges to non-profit groups that participate in "substantial lobbying"?

Conclusion 
Decision: 9 votes for Regan, 0 vote(s) against
Legal provision: Amendment 1: Speech, Press, and Assembly

No and no. Justice William H. Rehnquist authored the opinion for a unanimous court. Allowing a non-profit to solicit tax-deductible donations is a form of paying for its operations. Pointing to its decision in Cammarano v. United States, the Court maintained that "Congress is not required by the First Amendment to subsidize lobbying." The federal government does not have to sponsor every activity that the First Amendment protects, and its choice to sponsor one type of activity does not force it to sponsor every related type of activity. The federal government can choose to support veterans' lobbying organizations without also having to fund the lobbying of other groups. Non- profit groups interested in offering tax-deductions to donors can separate with the parts of the organization engaged in lobbying.

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REGAN v. TAXATION WITH REPRESENTATION OF WASHINGTON. The Oyez Project at IIT Chicago-Kent College of Law. 20 June 2014. <http://www.oyez.org/cases/1980-1989/1982/1982_81_2338>.
REGAN v. TAXATION WITH REPRESENTATION OF WASHINGTON, The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/1980-1989/1982/1982_81_2338 (last visited June 20, 2014).
"REGAN v. TAXATION WITH REPRESENTATION OF WASHINGTON," The Oyez Project at IIT Chicago-Kent College of Law, accessed June 20, 2014, http://www.oyez.org/cases/1980-1989/1982/1982_81_2338.