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.
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"?
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.
Decisions
Decision: 9 votes for Regan, 0 vote(s) against Legal provision: Amendment 1: Speech, Press, and Assembly
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Full Opinion by Justice William H. Rehnquist
