Conservative group takes on IRS over 'vague' rules silencing free speech
A landmark case challenging the Internal Revenue Service (IRS) multifactor "facts and circumstances" test argues it is being used to silence speech by conservative nonprofits seeking tax-exempt status.
Freedom Path, a Texas nonprofit group founded in 2011, was established with a focus on repealing Obamacare and the balanced budget amendment. The group maintains it was denied tax-exempt status as a social welfare organization after a nine-year administrative process because the IRS deemed it too political.
Lex Politica CEO Chris Gober spoke to Fox News Digital about Freedom Path, Inc. v. IRS on Wednesday, hours before arguing on behalf of Freedom Path at its first hearing at a Washington, D.C. courthouse. He broke down their years-long fight and why it matters to other nonprofits.
"We applied for tax-exempt status back in 2011," he told Fox News Digital. "Largely nothing happened for a long time. And then, all of a sudden, about a year and a half later, we got a request from the IRS to say, ‘We need more information, and we need you to disclose your donors to us.’ And it was just a very, very odd request. And we basically told them to pound sand. It wasn't too long afterward that the Lois Lerner scandal came to life."
Then-Acting Director of Exempt Organizations at the IRS Lois Lerner was at the center of the IRS targeting controversy in 2013 when the agency was accused of showing bias against conservative political groups applying for tax-exempt status. The IRS official admitted the agency had been placing extra scrutiny on groups with names such as "Tea Party" and "Patriots."
In May 2013, Lerner apologized at an American Bar Association meeting for the IRS's inappropriate targeting of conservative groups. Years later, Freedom Path says the agency continues to place unfair scrutiny on conservative organizations.
"People don't realize that the IRS is still using the exact same tests and the mechanisms that they used to target conservatives back in 2010 and 2011," Gober said. "Those are still on the books, exactly the same way they were then."
"You have a lot of the same government bureaucrats, the non-political bureaucrats that have been there at the IRS and were there during the Lois Lerner days that are still there. In fact, a lot of them have been promoted," he asserted.
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The lawsuit asks the court to review the constitutionality of the IRS’s 11-factor "Facts and Circumstances" test, which Freedom Path says is used to evaluate "whether advocacy communication constitutes issue advocacy or political campaign intervention."
Freedom Path claims it was forced to kill a television ad supporting the repeal of Obamacare due to the vagueness of the law. Gober said the test effectively forces conservative organizations to self-censor to avoid potential government retaliation.
"It is just this really ambiguous test that, in practicality, allows an IRS agent to basically just decide on their own if they want to treat [nonprofit communications] as political or not," he told Fox News Digital. "It's really no test at all. It's so open-ended, broad and subjective that anybody, depending on what you want the result to be, you can get to that result using this test and that's our problem with it."
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Gober argued the Supreme Court struck down similar tests as unconstitutional, most notably in the Citizens United ruling.
"What we're seeing is this almost exact same test has been struck down for use by the Federal Election Commission, but the IRS kind of sits there and says, 'Oh, that doesn't – those cases don't apply to us,'" he continued. "'We're still going to apply this rule as we see it.' And so we're trying to kind of effectively get the IRS to follow the same rules that the Federal Election Commission has to follow."
"We are trying to get that tossed out once and for all," Gober said of "Facts and Circumstances." "What we want is those rules tossed out, and then the IRS have to come back and create a new rule to define what is considered political campaign intervention versus issue advocacy."
Freedom Path has asserted over the years that it is properly organized as a Section 501(c)(4) social welfare organization and entitled to engage in constitutional free speech activities that do not cross over the political line.
Gober said that if the rule is changed it could have a huge impact on "more than one million" nonprofit organizations operating on both sides of the political aisle in the United States.
"This isn't just about one organization — this is about whether unelected bureaucrats can use tax law to silence political speech they don't like. Every conservative group in America should be paying attention," he said.
The IRS told Fox News Digital it did not comment on pending litigation.