Campaign Finance Disclosure and Section 527 of the Code: A Look at the District Court\u27s Opinion in \u3cem\u3eNational Federation of Republican Assemblies\u3c/em\u3e

This report examines the decision of the U.S. District Court for the Southern District of Alabama in National Federation of Republican Assemblies v. United States, which dealt with section 527 political organizations

Taxpayer Standing and \u3cem\u3eDaimlerChrysler v. Cuno:\u3c/em\u3e Where Do We Go From Here?

In granting certiorari in the case of Daimler-Chrysler Corp. v. Cuno, the Supreme Court asked the parties to brief whether respondents have standing to challenge Ohio\u27s investment tax credit. This report applies modern standing doctrine to the Cuno case and concludes that the Cuno plaintiffs do no have standing to raise their claims in federal court. Moreover, the authors write, allowing the Cuno plaintiffs\u27 case to be resolved in federal court would open the federal court system to a wide range of taxpayer challenges better left to the political branches of government. Nevertheless, they recognize that there may be other litigants that would have standing to challenge Ohio\u27s investment tax credit in federal court

The Internal Revenue Service and a Crisis of Confidence: A New Regulatory Approach for a New Era

The Internal Revenue Service is not usually thought of as the agency charged with enforcing the nation’s campaign finance laws. It has found itself, however, at the center of a firestorm over both its involvement and its ineptitude in enforcing certain rules that regulate the campaign activities of tax-exempt organizations. For historical, legal, and practical reasons, the Internal Revenue Code regulates the political activity of tax-exempt groups, in some instances providing for disclosure of campaign donors and expenditures, and in other instances limiting the amount of political activity engaged in by tax-exempt organizations. As campaigns become more sophisticated and complicated, pressure is placed on the rules regulating the political activity of tax-exempt organizations. The current structure regulating the political activity of tax-exempt organizations is unworkable, and the recent crisis resulting from the IRS’s use of partisan criteria to determine what applications for exempt status should come under further inquiry highlights the breakdown in the current regulatory regime. Just as it is wrong for the IRS to use partisan criteria in an unbalanced way to examine the applications of social welfare organizations, so too is it wrong for the IRS to refuse to enforce provisions in the Code regulating tax-exempt entities. To the extent that tax-exempt organizations are abusing their tax exempt status or are circumventing congressional intent with regard to the disclosure of campaign contributions, lax enforcement by the IRS also impacts our confidence in the agency. Unfortunately, under enforcement or over enforcement may have a partisan bias if groups engaging in one type of activity or another are dominated by one ideology. In order to restore confidence in the fair and equitable treatment of groups engaged in political activity, Congress must take a broad approach that reforms the statutory framework for regulating tax-exempt organizations, fixes a broken enforcement process, and provides for greater transparency for actions taken by the IRS. This article explores the first step in the reform process, namely reform of the statutory framework regulating tax-exempt organizations involved in political campaign activity. Part II of this article outlines the current regulatory environment facing tax-exempt entities that wish to engage in political activities. Part III discusses the current crisis, including the IRS’s actions and the abusive activities of tax-exempt organizations that caused many academics and politicians to call for better enforcement of the rules regarding political campaign intervention and tax-exempt entities. Part IV suggests reforms in the legal and regulatory rules governing tax-exempt entities

Political Campaigning by Churches and Charities: Hazardous for 501(c)(3)s, Dangerous for Democracy

Nonprofit section 501(c)(3) organizations are prohibited from participating or intervening in an election on behalf of a candidate for public office. Despite this prohibition, 501(c)(3) tax-exempt organizations have become increasingly active in political campaigns. Many organizations are either ignoring the political campaign ban or are using issue discussion or lobbying as a means of promoting candidates and testing the limits of the prohibition. Current scholarship surrounding the political campaign ban argues that the ban is either unconstitutional or inappropriate as a matter of public policy. This article argues that the ban is both meritorious and constitutional. It argues that taxpayer subsidized section 501(c)(3) organizations should not be permitted to intervene in political campaigns and that allowing them to do so will pose significant risks for the democratic system in the United States. It further argues that enforcement efforts with regard to the political campaign ban should be made public and delegated to an independent commission, outside the IRS, charged with enforcing campaign related prohibitions in the Internal Revenue Code

Campaign Disclosure and Tax-Exempt Entities: A Quick Repair to the Regulatory Plumbing

This article argues that there are some quick regulatory fixes the Treasury can implement to ensure that tax-exempt organizations are operating within the rules and that aggressive tax planning is not being used as a way to obfuscate rules for political organizations requiring disclosure. The article recommends that Treasury promulgate new regulations to require disclosure by tax-exempt entities of expenditures and contributions in excess of $25,000. The article also proposes that Treasury institute procedures to require tax-exempt organizations to file for exempt status, and to provide procedures for ensuring that these organizations meet the requirements in the statute and are not being used as a mechanism to avoid disclosure provisions in the Internal Revenue Code