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A Case Study of Legislation vs. Regulation: Defining Political Campaign Intervention Under Federal Tax Law

39 Pages Posted: 4 Apr 2014  

Ellen P. Aprill

Loyola Law School Los Angeles

Date Written: April 2, 2014

Abstract

The rules that should govern political campaign intervention by social welfare organizations exempt from taxation under § 501(c)(4) of the Internal Revenue Code have been the subject of recent controversy. Long before all the attention, a group of dedicated and experienced experts on the topic, under the auspices of two well-known nonprofit groups, undertook the task of clarifying the rules regarding tax-exempt political activity. In light of the issues becoming national news, the group, known as the Bright Lines Project, also converted the regulatory proposal into legislative language. These two versions of the same rules — as a set of regulations and as a set of statutes — provide a natural laboratory to compare the administrative law implications of choosing between legislation and regulation to establish a set of tax rules. This Article undertakes that examination. It concludes that, if revenue rulings interpreting regulations are afforded deference under Auer v. Robbins and Bowles v. Seminole Rock & Sand Co., promulgating the initial definition of political campaign intervention as a set of regulations may well give the Internal Revenue Service greater power to police political campaign intervention by exempt organizations than would the enactment of detailed legislation. It recommends, however, that broad statutory guidance, followed by regulations, and then by revenue rulings strike the best balance between democratic concerns and administrative flexibility.

Suggested Citation

Aprill, Ellen P., A Case Study of Legislation vs. Regulation: Defining Political Campaign Intervention Under Federal Tax Law (April 2, 2014). Duke Law Journal, Vol. 63, p. 101, 2014; Loyola-LA Legal Studies Paper No. 2014-11. Available at SSRN: https://ssrn.com/abstract=2419663

Ellen P. Aprill (Contact Author)

Loyola Law School Los Angeles ( email )

919 Albany Street
Los Angeles, CA 90015-1211
United States
213-736-1157 (Phone)
213-380-3769 (Fax)

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