461 U.S. 540, 545 (1983)
Taxation With Representation of Washington is a nonprofit corporation formed to promote what it views as the public interest in federal taxation by advocating its positions before Congress, the Executive Branch, and the Judiciary.1 It was created to assume the operations of two predecessor organizations: Taxation With Representation Fund, which published a journal and pursued litigation under § 501(c)(3) status, and Taxation With Representation, which focused on influencing legislation under § 501(c)(4) status.2 TWR applied for tax-exempt status under § 501(c)(3) of the Internal Revenue Code, but the Internal Revenue Service denied the application on the ground that a substantial part of its activities would involve attempts to influence legislation.34
TWR filed suit in federal district court against the Commissioner of Internal Revenue, the Secretary of the Treasury, and the United States.5 It sought a declaratory judgment that it qualified for the § 501(c)(3) exemption and asserted that the lobbying restriction violated the First Amendment and the equal protection component of the Fifth Amendment's Due Process Clause.6 The district court granted summary judgment to the government defendants.7
On appeal, the en banc Court of Appeals for the District of Columbia Circuit reversed.8 It concluded that § 501(c)(3) did not violate the First Amendment but did violate the Fifth Amendment.9 The government defendants appealed to the Supreme Court under 28 U.S.C. § 1252, TWR cross-appealed, and the Supreme Court noted probable jurisdiction.1011
Section 501(c)(3) organizations may receive tax-deductible contributions under § 170(c)(2) but may not engage in substantial lobbying, while § 501(c)(4) organizations may lobby substantially but contributions to them are not deductible.12 TWR could qualify for exemption under § 501(c)(4) or operate through a dual structure with a § 501(c)(3) entity for nonlobbying work and a § 501(c)(4) affiliate for lobbying, provided the entities remain separate.13 In contrast, veterans' organizations qualifying under § 501(c)(19) may engage in substantial lobbying while still receiving tax-deductible contributions.14
Whether the prohibition on substantial lobbying in 26 U.S.C. § 501(c)(3) violates the First Amendment?15
The government may not deny a benefit to a person because he exercises a constitutional right.16 Congress is not required by the First Amendment to subsidize lobbying.17 Tax exemptions and deductions are a form of subsidy administered through the tax system.18 They have much the same effect as a cash grant.19 Congress may choose not to subsidize lobbying as extensively as other activities that nonprofit organizations undertake to promote the public welfare.20
No. Taxation With Representation of Washington is a nonprofit corporation formed to promote what it views as the public interest in federal taxation by advocating its positions before Congress, the Executive Branch, and the Judiciary.21 It was created to assume the operations of two predecessor organizations.22 Taxation With Representation Fund published a journal and pursued litigation under § 501(c)(3) status.23 Taxation With Representation focused on influencing legislation under § 501(c)(4) status.24 TWR applied for tax-exempt status under § 501(c)(3) of the Internal Revenue Code.25 The Internal Revenue Service denied the application on the ground that a substantial part of its activities would involve attempts to influence legislation.
TWR filed suit in federal district court against the Commissioner of Internal Revenue, the Secretary of the Treasury, and the United States. It sought a declaratory judgment that it qualified for the § 501(c)(3) exemption.26 It asserted that the lobbying restriction violated the First Amendment and the equal protection component of the Fifth Amendment's Due Process Clause.27 The district court granted summary judgment to the government defendants.
On appeal, the en banc Court of Appeals for the District of Columbia Circuit reversed. It concluded that § 501(c)(3) did not violate the First Amendment but did violate the Fifth Amendment. The government defendants appealed to the Supreme Court under 28 U.S.C. § 1252.28 TWR cross-appealed. The Supreme Court noted probable jurisdiction. Applying the rule, the Code does not deny TWR the right to receive deductible contributions to support its non-lobbying activity.2930 It does not deny TWR any independent benefit on account of its intention to lobby.31 TWR can qualify for a tax exemption under § 501(c)(4).32 It can obtain tax-deductible contributions for its nonlobbying activity by returning to the dual structure.33 It can use a § 501(c)(3) organization for nonlobbying activities and a § 501(c)(4) organization for lobbying.34 The entities must remain separate so that tax-deductible contributions are not used for lobbying.35
The prohibition on substantial lobbying in 26 U.S.C. § 501(c)(3) does not violate the First Amendment.36
Related opinions on this issue
Justice Blackmun joined the Court's opinion but wrote separately to emphasize that the result under the First Amendment depends entirely upon the IRS administering § 501 to allow a § 501(c)(3) organization to have a § 501(c)(4) affiliate for lobbying.37 He noted that if the IRS attempted to limit the control these organizations exercise over the lobbying of their affiliates, the First Amendment problems would be insurmountable.38 It hardly answers one person's objection to a restriction on his speech that another person outside his control may speak for him.39
Blackmun assumed the IRS would continue to administer the sections in keeping with Congress's limited purpose of ensuring that no tax-deductible contributions are used to pay for substantial lobbying.40
Whether the distinction allowing veterans' organizations under 26 U.S.C. § 501(c)(19) to engage in substantial lobbying while denying the same to § 501(c)(3) organizations violates the equal protection component of the Fifth Amendment's Due Process Clause?41
Statutory classifications are valid if they bear a rational relation to a legitimate governmental purpose.42 Legislatures have especially broad latitude in creating classifications and distinctions in tax statutes.43 Strict scrutiny applies if a classification interferes with a fundamental right or employs a suspect classification such as race.44 The distinction here is not invidious discrimination aimed at the suppression of dangerous ideas.45
No. Section 170(c)(3) permits taxpayers to deduct contributions to veterans' organizations that qualify for tax exemption under § 501(c)(19).4647 Those organizations are permitted to lobby as much as they want in furtherance of their exempt purposes.48 The distinction between veterans' organizations and other charitable organizations is rationally based on the nation's longstanding policy of compensating veterans for their past contributions by providing them with numerous advantages.49 This policy has always been deemed legitimate.50
The sections of the Internal Revenue Code at issue do not employ any suspect classification.51 There is no indication that the statute was intended to suppress any ideas or has had that effect.52
The distinction allowing veterans' organizations under 26 U.S.C. § 501(c)(19) to engage in substantial lobbying while denying the same to § 501(c)(3) organizations does not violate the equal protection component of the Fifth Amendment's Due Process Clause.53
Related opinions on this issue
Justice Blackmun joined the Court's opinion.54 He agreed that § 501's discrimination between veterans' organizations and charitable organizations is not based on the content of their speech.55 He concurred that the benefit provided to veterans' organizations is rationally based on the Nation's time-honored policy of compensating veterans for their past contributions.56
Blackmun noted that a statute designed to discourage the expression of particular views would present a very different question.57 He emphasized that the classification does not deny equal protection because it is content-neutral and rationally related to a legitimate governmental purpose.58