TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, January 2, 2017

Brunson:  More On Hate Groups And Tax Exemptions

Following up on Saturday's post, Volokh: The IRS May Not Deny Tax Exemptions To ‘Hate Groups’:  Sam Brunson (Loyola-Chicago), More on Hate Groups and Tax Exemptions:

Over at the Volokh Conspiracy, Eugene Volokh asserts that the IRS cannot constitutionally deny tax exemptions to “hate groups” based on their views, abhorrent that they may be. ... Since he name-checks me and fellow Surly blogger Phil Hackney, I figured it was worth responding to his piece. ... I don’t intend to be comprehensive here, but I want to make five main points: ...

Even if it turns out that Volokh is right, I stand by my statement that we should be uncomfortable with the idea that the government is subsidizing white nationalist speech. If the Constitution requires such subsidy, so be it. But even if the government has no choice but to allow the exemption of these groups (with the concurrent deductibility of donations), we shouldn’t get comfortable with the idea. After all, the fact that individuals have the right to engage in abhorrent speech doesn’t mean that we need to become comfortable with the content of that speech.

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One of the arguments made by Mr. Brunson's colleague in another post was: "The IRS is afraid. This seems like a reasonable argument after all the Tea Party difficulties that the IRS experienced... the Tea Party controversy occurred in 2013 and so maybe this is a reason it would not go after such groups now."

In reviewing the list of 55 tax-exempt hate groups (so-called) compiled by the Chronicle of Philanthropy, I found that 96% of the organizations received their tax-exempt prior to the revelations of IRS malfeasance in 2013. Most received their exemptions decades before, with 2/3 of the groups dating back to the 1970s, 1980s, and 1990s, including the 6 largest groups by annual $ revenue.

Also, judging by their names and websites, the vast majority of groups on this list are not white nationalist at all, but rather very religious conservative groups primarily concerned with abortion, gay marriage, etc. the usual social issues on the right. Again, this includes some of the largest groups by annual $ revenue.

Now, Mr. Brunson argues that "we" shouldn't be comfortable living in a society where a handful of white nationalist groups, with low or no annual $ revenues according to the Chronicle of Philanthropy, receive tax-exempt status and also espouse odious positions. I'll point out that there were a handful of Islamic organizations on the list that elicited no similar concern from the author despite presumably espousing anti-semitic views.

However, if the IRS wants to reevaluate the tax-exempt status of ALL organizations, consistently and fairly, and revoke any that no longer qualify, I see absolutely no problem with that whatsoever.

But I'd also like to see, in the interest of consistency and fairness, that the IRS scrutinize the tax-exempt status of every single public college and university in the country that has policies and practices that clearly violate the First and Fifth Amendments to the Constitution. I'll make it easy for the IRS: A couple even made FIRE's list of worst colleges for 2016:

Posted by: MM | Jan 2, 2017 11:34:32 AM