As of March of 2006, the NAACP has declared its intentions to engage the IRS's claims in federal court and argue that the statements of its Chairman were not campaign activity, but rather constitutionally protected speech concerning important issues of public policy.[6]  In addition to questioning the validity of the claims, the NAACP also questions the agency's motivations: "We remain concerned that the IRS's decision to audit the NAACP, particularly the timing of the commencement of this audit, was motivated by politics rather than grounded in the federal tax law."[7]  It is the NAACP's goal to "defend the principles at stake and demand better treatment on behalf of the countless organizations in our sector that need clear guidance in this area."[8]

III. The Nature and Boundaries of the Political Campaign Limitation

The justifications underlying the prohibition on political campaign intervention are borne out of the notion that the government is not, and should not be in the business of subsidizing political campaigning, even indirectly through deductible contributions.[9]  Beyond this, one might also argue that the province of the charitable world should remain untainted by the political world.  The political campaign limitation has already passed Constitutional muster; so long as the limitation only declines to subsidize political speech.[10]  The Supreme Court has determined that a charitable organization may exercise its voice in the political arena by way of the creation of a related section 501(c)(4) organization (an organization which may not receive deductible donations), and therefore, there is no meaningful First Amendment violation.[11]

IV. IRS Guidance in the Area of the Political Campaign Limitation - An Oxymoron?

The standard regarding what constitutes intervention in a political campaign is loosely defined in both the Code and regulations.  Charitable organizations, therefore, are by and large left to rely upon case law and Revenue Rulings as the predominant sources of specific guidance on the issue.  For example, a charitable organization is not prohibited from engaging in neutral, educational speech regarding political campaigns.[12]  However, when the "format" or "content" of a statement or publications ceases to be neutral in any way, it becomes a prohibited intervention in a political campaign.[13]  In a February publication seemingly directly aimed at the NAACP investigation and resultant opposition, the IRS tried to shed some additional light on the topic: "The political campaign intervention prohibition is not intended to restrict free expression on political matters by leaders of organizations speaking for themselves, as individuals.  Nor are leaders prohibited from speaking about important issues of public policy.  However, for their organizations to remain tax exempt under section 501(c)(3), leaders cannot make partisan comments in official organization publications or at official functions of the organization."[14]

V. Does the NAACP have a case?

It strikes this author that the NAACP seems to be gearing up for a due process argument.  Given the organization's expressed concern that the IRS was acting out of political motivation rather than through routine application of auditing procedures, it appears that they will try to frame the situation as one in which they were singled out as an example during a time when many charitable organizations may have been pushing the campaign limitation envelope.  The argument does not strike this author as without merit.  Putting aside this as yet unsubstantiated argument, however, it does not seem that the NAACP has much of a case at all.  In admonishing NAACP members and more importantly, the public generally (through use of its website) that they "must guarantee [that what happened in the 2000 election] never, ever happen again,"[15] and in particular by mentioning Bush by name, Chairman Bond has at very least toed the line of what separates protected discourse on matters of public policy from prohibited campaign intervention.  The counter-argument is that the Chairman's words could be construed only to reflect his concern that the ballot abnormalities of the 2000 election not be repeated.  While not a losing argument on its face, it is very difficult, at least for this author, to construe the Chairman's words as being non-partisan in light of the fact that he went on to discuss other Bush administration policies concerning the war in Iraq, the economy, and the state of civil rights, among others.[16]

VI. Conclusion

Is every charity's work inherently apolitical?  Should it be?  Can a charitable organization which was at the forefront of the civil rights movement even attempt accomplishment of its goals without engaging in uncensored political discourse?  These are the difficult questions.  The easy answer the law gives is that these organizations can through related uncharitable organizations, but not using tax deductible donations.

[1] Lisa Getter, IRS Investigating NAACP for Criticism of President, THE L.A. TIMES, Oct. 29, 2004, available at http://www.truthout.org/docs_04/printer_1030041.shtml.

[2] Id.

[3] Mike Allen, NAACP Faces IRS Investigation, THE WASHINGTON POST, Oct. 29, 2004, available at http://www.washingtonpost.com/wp-dyn/articles/A7433-2004Oct28.html.

[4] Charitable status is available to "any community chest, fund, or foundation, organized and operated exclusively for . . . educational purposes . . . which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office."  26 U.S.C.A. §501(c)(3) (West 2006).

[5] 26 U.S.C.A. §4955 (West 2006).

[6] NAACP.org, NAACP Will Challenge the IRS Threat in Federal Court (Mar. 30, 2006), at http://www.naacp.org/news/2006/2006-03-30.html.

[7] Id.

[8] Id.

[9] See Branch Ministries, Inc. v. Rossotti, 211 F.3d 137, 143 (C.A.D.C. 2000).

[10] See generally  Regan v. Taxation with Representation of Washington, 481 U.S. 540 (1983) (Blackmun, J., dissenting).  Though this case dealt with the First Amendment as it pertains to restrictions on lobbying imposed on charitable organizations, it has been applied as persuasive in political campaign cases such as the above-cited Branch Ministries, Inc.

[11] See id.; see also Rossotti, 211 F.3d at 143.

[12] Rev. Rul. 78-248, 1978-1 C.B. 154.

[13] Rev Rul. 80-282, 1980-2 C.B. 178.

[14] Election Year Activities and the Prohibition on Political Campaign Intervention for Section 501(c)(3) Organizations (February 17, 2006), at http://www.irs.gov/newsroom/article/0,,id=154712,00.html.

[15] Getter, supra note 1.

[16] Id.