IRS censorship of nonprofits must give way to the First Amendment

Because of legal restrictions on nonprofit, “charitable” organizations, I am not allowed to say that Donald Trump poses an existential threat to First Amendment freedoms. I believe it to be true.  But as executive director of the First Amendment Coalition, I am supposed to keep such thoughts to myself.

The freedom to engage in public debate during the run-up to an election—criticizing one candidate, supporting an opponent—is taken for granted in America and rightly considered a birthright of citizenship. But this freedom does not exist for organizations, like FAC, that are exempt from tax under section 501C3 of the tax code.

For over forty years the IRS has prohibited political “intervention” or “participation” by 501C3 organizations in support of (or opposition to) candidates for elective office. The rules apply not only to lobbying and campaign contributions, but also to advocacy–specifically including candidate endorsements.

While this muzzling of expression is, in my view, highly suspect under the First Amendment—particularly when applied to pure speech about political matters—the nonprofit community, in general, takes it in stride. One hears few complaints by nonprofits about government censorship of their political speech. 

But there is one segment of the nonprofit world to which application of the IRS rules is, or should be, totally unacceptable. I am referring to news media outlets that are organized as 501C3 nonprofits. These include national media organizations, like ProPublica, Center for Investigative Reporting, Marshall Project, the Center for Public Integrity, Mother Jones, OpenSecrets, PublicSource, FairWarning and 100Reporters; regional news outlets, like Texas Tribune, MinnPost and the Lens; and, in California, news-dot-orgs such as Voice of San Diego, CalMatters, inewsource, Voice of OC, and CalCoast News.

Rare exceptions when the IRS rules were promulgated, news media outlets organized as 501C3 nonprofits have become commonplace. While they are unlikely to replace investor-owned news media anytime soon, they nonetheless are an influential and growing part of the journalism ecosystem—on which more and more people depend for news and analysis—at a time when traditional news media are in decline.

The notion that these organizations, solely because of their tax status, are forbidden to endorse or oppose candidates for public office—not just presidential candidates, but candidates for any elective office, federal, state or local—would certainly come as a shock to the Founding Fathers. Indeed, it is hard to imagine a government regulation that could be more at war with First Amendment principles.

Moreover, the IRS rules are not limited to candidate endorsements (or opposition statements). They also forbid  “indirect” involvement in political elections by means of “activities” that, “with  evidence of bias, . . .favor one candidate over another” or “have the effect of favoring a candidate. . .” As applied to media organizations, these murky rules cast doubt on the permissibility of much standard news coverage of issues that divide candidates in a contested election. Coverage that may seem more favorable to one candidate than another, or more critical of one candidate than another, could lead to a visit from a government censor (er, I mean IRS agent).

To avoid that kind of scrutiny, which in theory could lead to loss of tax-exempt status and loss of funding, editors at nonprofit news outlets have a powerful incentive to avoid news coverage of those matters entirely, or to dial back stories to give “equal time,” and credence, to all candidates’ policy positions, regardless of their merits. This kind of self-censorship, resulting from vague and misguided regulation of the content of expression, is exactly what the First Amendment forbids.

The courts have been generally unreceptive to these arguments. But the legal landscape changed with the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission. Though infamous for its removal of limits on corporate (and union) spending in elections, the Citizens United decision involved regulatory restrictions on “electioneering communications” that are remarkably similar to the IRS rules on nonprofits.

In striking down the FEC restrictions, the Court held broadly that limits on political speech that are geared to a speaker’s legal status–individual or corporate–are highly suspect under the First Amendment because they may disguise an impermissible purpose to disfavor certain ideas or certain speakers. Subjecting the restrictions on corporate speech to “strict scrutiny,” the Court found that the government’s asserted justifications for the restrictions did not hold water.

Tellingly, the Court also pointed out that if a speaker’s corporate status sufficed to permit government regulation of a corporation’s political speech, government would also have the power to regulate the editorial positions and news coverage of media outlets that are organized as corporations—an outcome that would, the Court said, fly in the face of the First Amendment.

The rationale of Citizens United leaves no room for the IRS’s blanket prohibition on participation in elections by section 501C3 nonprofits. The First Amendment, at minimum, protects all speech by nonprofit news media. They can say whatever they want, as often as they want, about elections. And non-media nonprofits? While limitations on their spending and contributions may pass muster, their pure speech on political matters is protected.

That is the First Amendment’s red line. The IRS may not cross it.


Peter Scheer, a lawyer and journalist, is FAC’s executive director. The views expressed here are his alone; he is not writing for or on behalf of FAC or its Board of Directors.

One Comment

  • I would have donated had you not, by slight of hand, expressed your feeling on Donald Trump.
    Trump, in fact, is the only candidate to propose lifting those IRS sanctions on religious organizations.
    The liberal, left-wing of the political elite have been stomping on First Amendment rights for years
    and years. I appreciate the effort of your organization, but to blatantly take sides in a presidential election upends my apple cart.

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