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Abstract:
Lobbying is both an essential part of our democratic process and a source of some of our greatest fears about dangers to that process. Yet when Congress, the public, and scholars consider loosening or, as is more often the case, tightening the restrictions on lobbying, they usually assume that everyone knows what activities are in fact lobbying. They therefore overlook the fact that multiple definitions of lobbying currently exist in the various federal laws addressing lobbying. This Article seeks to fill this gap by answering the question of how lobbying should be defined for purposes of the existing federal laws relating to lobbying. The Article first explores the three sets of applicable laws, which tax lobbying, disclose lobbying, and restrict lobbyists. This exploration reveals that all three sets of laws arise out of a common concern regarding the influence of interest groups on government actions. Drawing on the extensive research regarding how interest groups wield such influence, the Article then determines that this research strongly suggests that the vulnerability to interest group methods that raise the greatest concerns varies depending on the type of government actor that an interest group seeks to influence. The Article therefore proposes the adoption of single definition of lobbying that covers all direct attempts to influence government officials and employees in Congress and at the very highest levels of the Executive Branch, while excluding attempts to influence other types of government actors and to influence the public.

Abstract:
More than fifty years ago, Congress enacted a prohibition against political campaign intervention for all charities, including churches and other houses of worship, as a condition for receiving tax deductible contributions. Yet the IRS has never taken a house of worship to court for alleged violation of the prohibition through political comments from the pulpit, presumably at least in part because of concerns about the constitutionality of doing so. This decision is surprising, because a careful review of Free Exercise Clause case law - both before and after the landmark Employment Division v. Smith decision - reveals that the prohibition almost certainly would have survived a constitutional challenge.

Now, however, two changes to the relevant legal landscape may shift the balance toward houses of worship seeking to challenge the prohibition in the sermon context and generate new concerns for the federal government, even as the IRS begins to more aggressively investigate alleged violations. The first change was Congress' enactment of the Religious Freedom Restoration Act of 1993, which codified the substantial burden/strict scrutiny analysis articulated by the Supreme Court in pre-Smith Free Exercise Clause cases but rarely followed by that Court in practice. While no longer applicable to state and local laws, RFRA still applies to federal laws, including the prohibition. The second change is the growing support among both courts and scholars for an institutional approach to protecting constitutional rights, particularly in the context of religious organizations. This approach suggests that houses of worship challenging the prohibition may be able to argue successfully that the ability to speak to their members about matters of religious conviction is a necessary aspect of free exercise and so the government cannot, either constitutionally or under RFRA, discourage such speech by placing a condition on the receipt of a long-standing tax benefit.

Part I of this Article briefly describes the prohibition and its history. Part II reviews current and past Free Exercise Clause case law and explains why the prohibition almost certainly would have withstood constitutional challenge under those decisions. Part III examines the legislative history and application of RFRA, including the difficult question of what that Act actually "restored," and then applies RFRA to the prohibition. This Part concludes that as applied to the specific context of a religiously motivated sermon the prohibition substantially burdens exercise of religion within the meaning of RFRA. Once that conclusion is reached, RFRA requires the government to demonstrate that the prohibition is the least restrictive means for furthering a compelling government interest. I argue that the government would find such a demonstration difficult if not impossible to make, even taking into account Establishment Clause concerns raised by creating a RFRA-based exception to the prohibition for houses of worship. Part IV explores the developing institutional view of free exercise and argues that a proper appreciation of that view would bar the government from applying the prohibition to not only sermons but also a broader range of internal communications from religious leaders to the members of their houses of worship on matters of religious importance, under both the Constitution and RFRA. Finally, Part V briefly addresses whether as a practical matter an exception to the prohibition could be appropriately defined and limited.

charity, church, tax-exempt organization, political, election, IRS, first amendment, free exercise, religion, religious freedom restoration act, RFRA, church autonomy, ministerial exception

Abstract:
The continuing controversy over 527 organizations has led Congress to impose extensive disclosure requirements on these political organizations and to consider imposing extensive restrictions on their funding as well. The debate about what laws should govern these entities has, however, so far almost completely ignored the fact that such laws raise a complicated institutional choice question.

This Article seeks to resolve that question by developing a new institutional choice framework to guide this and similar choices. The Article first explores the context for making this determination by describing the current laws governing 527s, including both federal election laws administered by the Federal Election Commission and federal tax laws administered by the Internal Revenue Service. The Article then proposes and applies an institutional choice framework to guide the decision of into which body of substantive law the current and proposed rules for 527s should be incorporated. The Article concludes that while regulation of political activity through both election law and tax law can work reasonably well, the different tasks for which these bodies of law and their implementing agencies are best suited require a different allocation of responsibilities than both current and proposed laws governing 527s provides. Finally, the Article identifies other areas that may benefit from application of this framework.

527, Institutional Choice, Institutional Design, Campaign Finance, Tax-Exempt Organization, Political Organization, FEC, IRS

Abstract:
The rule that charities are not allowed to intervene in political campaigns has now been in place for over fifty years. Despite uncertainty about the exact reasons for Congress' enactment of it, skepticism by some about its validity for both constitutional and public policy reasons, and continued confusion about its exact parameters, this rule has survived virtually unchanged for all of those years. Yet while overall noncompliance with the income tax laws has drawn significant scholarly attention, few scholars have focused on violations of this prohibition and the IRS' attempts to enforce it.

This Article focuses on the elusive issue of how extensive is noncompliance with this prohibition and how could the IRS improve its enforcement in this area. The limited data available about the extent of noncompliance indicates that while violations involving extensive expenditures or high profile activities are relatively rare, minor and probably mostly inadvertent violations may be much more widespread than current IRS enforcement figures would indicate. Such violations should be of concern because they risk creating a culture of noncompliance, they may harm the public's trust in both the violating charities and the charitable sector as a whole, and they may have significant effects on the outcome of political campaigns because of the public's generally high regard for charities. To address these violations, the Treasury Department and the IRS should adopt three strategies. First, the IRS should reduce its reliance on third-party complaints by pro-actively looking in publicly available information for possible violations, including by reviewing websites, media reports, and state campaign finance filings. Second, the Treasury Department should adopt an approach that has generally worked in other tax contexts by clarifying the vague boundaries of the prohibition through creating safe harbors for the most common election-related activities, while retaining the current facts and circumstances approach as an anti-abuse rule. Third and finally, the IRS should continue to fully utilize the flexibility of the existing penalty regime to tailor penalties to match violations, issuing only "warning tickets" for first time, apparently unintentional violators while reserving financial penalties and revocation of tax-exempt status for repeat and intentional violators.

Charity, Tax-Exempt Organization, Political, Election, IRS, Tax Compliance, Tax Enforcement

Abstract:
With a brief order issued at the end of its last term, the Supreme Court dramatically raised the stakes in Citizens United v. FEC. What many had predicted would be a case decided on narrow, technical grounds has now become a possible vehicle for overturning two key campaign finance precedents. By ordering re-argument and supplemental briefing on the issue of whether it should overrule either or both Austin v. Michigan Chamber of Commerce and the part of McConnell v. FEC which addresses the facial validity of Section 203 of the Bipartisan Campaign Reform Act of 2002, the Court signaled that it was considering breaching the already leaking dam that keeps corporate (and union) funds at least partially out of federal elections.

The first part of this Article places the Citizens United case in context by reviewing the almost 100 years of gradually tightening federal election laws governing the use of corporate funds, including the Court’s decision in Austin that upheld a state election law ban on corporations making certain election-related expenditures. The second part reviews the specific facts and issues raised in Citizens United. The third part then addresses how the Court is likely to answer the new question it has posed. That part concludes that given the stated and likely positions of the current nine Justices, the argument that is most likely to convince a majority of the Court not to overturn Austin is the doctrine of stare decisis, although that result is far from assured. Even stare decisis is unlikely to preserve the relevant portion of McConnell, however. The fourth and final part addresses the potential ramifications if the Court overrules either or both of the precedents it cited, including the new pressure an overruling of Austin would place on seemingly unrelated federal tax laws governing tax-exempt, nonprofit corporations.

campaign finance, election law, BCRA, Citizens United v. FEC, WRTL v. FEC, Buckley v. Valeo

Abstract:
For more than fifty years scholars, practitioners, and government officials have debated whether the federal government, the state governments, or the charitable sector itself can best ensure that charitable organization leaders fulfill their fiduciary duties. The dramatic growth of this sector, recent highly publicized governance scandals, and a push in Congress and the IRS for more federal involvement in this area have now brought this issue to a head. This article lays a foundation for resolving the dispute by developing an institutional choice framework for considering and comparing the various available options. Applying that framework, the article concludes that the best regulators of charity governance would most likely be state-level government agencies that work with but have a limited degree of independent from the state attorneys general. The article also determines that the best way to ensure adoption of this institutional choice – and limit potential weaknesses – is for the federal government to use a portion of the already existing private foundation investment income tax to provide funding for such agencies.

nonprofit corporation, governance, fiduciary duties, institutional choice, institutional design, tax-exempt organization, IRS