the determinative issue in this case is the dividing line between public policy discussion by not for profit groups which the internal revenue code and the constitution permits and encourages  and restricted lobbying on a ballot measure the foundation is here not to seek a refuse subsidy but it simply wants to know in advance which is which now this  however applied its own erroneous test and disregarded the mandate as a first amendment by conflating public policy discussion and restricted lobbying as the amicus brief of hundreds of progressive not for profits explained this jeopardizes the core function of not for profits showing their participation in public discussion about public issues while this case can be readily resolved in the foundation's favor by simply properly applying the i r s as to the first amendment mandate cannot be ignored since the trial court has set up a clear conflict between its rationale and the d c circuits opinion in big mama rag this court should not make that same error now this case is about the dividing line between public policy discussion and restricted lobby of course the internal revenue code imposes substantial penalties on a private foundation such as the park foundation if they engage in any lobbying but you have to respect  course the d c circuit case is not binding precedent for one case in the ninth circuit do you rely upon this being the closest case to support your position and i'm not aware of one ok so if we disagree with the rationale of the d c circuit in big mama read you lose no because the big mama rag applied the first amendment mandate to the  if your client has violated either provision and this is a taxable event i'm aware ok vic big mama rag really only dealt with the educational problem right yes ok so a big number of really doesn't help you very much with respect to the other issue well if you agree with trial court said that it can refer to a ballot measure if it names it which is of course the appropriate test but also if it if it without naming it employ terms widely used in connection with a ballot measure or describes the content or effect of the of the measure now this go there is that if that's how you're saying that the trial content or effect of the measure so these were two additional tests when when it's not actually named now we believe the proper test as i just said is if you name it or if you're naming a widely recognize debate about a measure and like campaign finance it would be something like let's get big money out of politics so if that though that phrase was in the ballot measure explanation of what this is intended to do this mccain feingold is intended to do somebody rides an ad and says let's get get money out of politics then then they would have connected the two they said well that refers to words that were used to support  therefore had identified mccain feingold but if the public if that's the information that's being given to the public isn't it reasonable to infer that the public would recognize that measure as having to do with an ministre to rules this ad refers to administrative rules now our contention is that the i r s has specifically rejected the idea that that citing words used to support a particular issue for instance like drug free america in example for they said that is not referring to a specific measure but major message five i'm giving the the i'm comparing what the trial court did here with respect to administrative rules with the right i r s regulations and saying the court misapplied the i regulations this one also says it doesn't just just doesn't just use the phrase administrative rules which was the key phrase but i admit it is fairly general but it says it's called administrative rules and you're going to hear a lot more about him in the weeks to come and this is just this is just what just a couple of weeks before an election which there's a referendum about administrative rules why isn't that why isn't that a reform well because you've got to be real because administratively rules could involve one upcoming event the government is adopting a mistretta rules all the time and remember the context here is discussion of public issues permitted by not for profit group lobbying that isn't your test would require them to actually state the name of the no or or the no and substitute yeah it's a bright line test ok because whenever because not for profits are entitled to know and not have their speech chilled on when when they would be considered to be doing lobbying and when they're not because when they do general public discussion the general public issues public issue which they are is an educational function of a not for profit to do that they need a bright line on when they're going to get punished so you're doing usery of things that the supreme court has routinely affirm congress's discretion to promote certain activities and not others yes correct and do you think that congress does not have the the authority to do that and haven't they chosen in this case  to not fund certain activities not subsidize certain actors and we're not saying that our this activity should be funded we are not saying that lobbying properly understood must be subsidised we are not saying that that's what they said and reagan what we are saying is we simply need to know the line the difference congress sad when they had doctored these lobbying restrictions it quote does not extend to the discussion of broad public problems and issues that's what congress has your argument that they were educational yes issue advocacy is educational wisconsin right to life says full specifically that edge of the issue advocacy is education yes and that congress has recognize and fact the regulations themselves regular challenging the referring reflect test what we are challenging is the application of that test by the trial courts because it is contrary to the regulations of the well in legal mentioned if you look at the two examples and b that we cited it clearly makes a distinction between a name or a name substitute and simply words used in the debate which is the trial courts didn't really announce a test but basically said if there's anything in the language that suggests that someone could view as positive or negative about the issue itself that reflects a view on them on the measure well if if it is true as i've explained that the law allows the discussion of public issues by not for profits then it would require something more than simply stating something favorable about having a drug free america it would have to take something more something as the as the make you argue and we argue in our  imposing a limited gloss because of the problems of vagueness and overbred that exist here with the trust court's test the philosophy around campaigning around reporting subject to a potential prohibition that you had to have a bright line taft and they rejected the features of the of the test employed here that is they reach it rejected the  idea that the context or the effect of the should be examined in order to determine that this communication is regular bill they also rejected because in order to prevail today you not only have to win on the refer reflect test which deals with lobbying but you have to deal on the educational question which is a methodology so you kind of blended some things here together that i'd like you to turn to the methodology that where we  constitutionality and you know under the forgiving estan citizens united it is their discussion in the in the tax court of the constitutionality of the methodology test is my understanding and methodology test where i was the we also challenge the methodology test of course the methodology test was adopted to respond to big mama rags and that the d c circuit rejected as unduly veg and in numerous examples which are set forth in our in our brief so we now what you're left with without the regulation and the methodology test is the fact that i've already cited that both the congress and the regulations specifically provide that general discussion of public policy issues is a permit morning me please the court should have me from the department of justice representing the commissioner this case is a tax case not an election law case the rules at issue determine whether the government is going to pay for part of the speech not whether the speech will be permitted in the first instance petitioner's constitutional argument ignores the clear distinctions between lives that prohibits the election like cases they talk about and one and want to pick up on something mr bob said where his his opening plea was for clarity so that the foundation knows in the future when it's been engaging in tax and taxable events and one it's not i want to know where the line is so that it can take advantage of the tax laws in an area that is related to speech so we ought to be sympathetic at least to the effort to know where the line is while we're engaging in speech the speech is protected one way or another that's not at issue here we agree on that but but i think we ought to be at least sympathetic to the idea that we ought to know why the tax laws impose liability where they don't share and we believe the tax laws provide sufficient notice as to what's taxable what's not but we do want to make clear that the standard of scrutiny that petitioners argue for definition in the regs for direct lobbying mess refer to reflect on view on specific legislation the regulations further spell out that communication can refer to legislation if it uses terms quote widely used in connection with a specific legislation that's on page twenty one of the agenda attached the petitioners prefer or describes the content or effect of legislation and what's important to remember in this case is that the i interpretation of direct law being set out in the regulations is fully consistent with the statutory term which is just broadly defined and forty nine set out in forty nine forty five is any attempt to influence legislation there sixty's congress was confronted with the situation that private foundations for misusing their funds private foundations unlike public charities are not subject to public scrutiny and public control and public contributions you have a single donor and a pot of money that subsidized by the government and the legislative history to forty nine forty five expresses congress was concerned that the private donors were using these funds for lobbying for political contributions for their own private enter and so forty nine forty five was put into place provide affective limitations on that type of activity and the irises functional interpretation of what refers to what direct lobbying will entail to include something that looking at the language of rule four and five in the tax court's analysis the tax words said that this advertisement reflects referred to the ballot measure because it used to terms widely used the line on the voter guides administrative rules and says you're going to hear a lot more about this in the weeks to come and this was during the same time period that the ballot measure was about to be void voted on and of context is important we're not looking at these words in a vacuum the context here is in point porton and the standard of review for determining whether the court's finding here is correct is clearly erroneous only cited so the reference here the vagueness of the methodology test was presented to the tax court it was not in the tax court expressly pointed out on page sixty eight no forty nine that there had been no vagueness challenge to that educational goals definition was only to the refers to part of the direct lobbying opposing counsel said that the strongest case to support his argument that there should be a bright line is wisconsin right to life do you agree or disagree well we disagree with constant right to life again this could back to how they're conflating laws that prohibit speech and criminalize speech and laws that just decline to subsidize and wisconsin right to front made in a federal crime for corporations to engage in certain political speech here there's no question that the corporation can engage in this type of speech the question is who's going to pay for it that's why this is a subsidy case and the was clear that refusing to subsidize lobbying or other speech activity protected by the first amendment does not infringe or regulate first i'm right the supreme court said that reagan the supreme court said that in camera no and supreme supporting the prop one brief comment on mr parks liability for it for the tax because we do believe that the tax court correctly determine the parks is liable for the tax on the foundation banisters as a manager of a private foundation mr parks has a duty to ensure that those funds which were subsidized by the government were used for the limited purposes for which  the foundation was not for profit tax exempt organization and if you failed in that duty he was liable for the tax unless he had reasonable cause and the parties stipulate in this case that if the foundation of found liable that mr parks would to advertisements two through five and in fact in the tax court feeling asserted the defense with regard to advertisements two through five to thumb page one forty one through one forty two with excerpts of record and the tax court looked at the two brief documents that address those memos and that it doesn't qualify because they were conclusory there was no reason analysis and in fact they haven't challenge that went on appeal they just try to void the stipulation altogether by saying well we can show reasonable and some other manner and that may well be the case in a different case but in this case they had stipulated that reasonable cause would be shown only by show by proving that he had relied on a reasoned written legal opinion and there's no reason to thank you i thought i had the reference to the trial court's decision or regarding the methodology test and i'm just going to have to rely upon our brief i know we have oh i just looked at the council decided page sixty eight footnote forty nine i just looked at it and the tax court said you didn't raise a first amendment argument citing big mama rag and says not going to address it so that i know that we dealt with that all the tax court was simply wrong in that footnote no the i know you dealt with it in your brief it didn't but the question is whether did you raise this below before the tax court we believe we did because we generally challenge the constitutionality of the regulations and that is sufficient and we argue that in our brief that that issue that question in our brief so we believe that we have met that standard now secondly regarding a bright line bright line is required that the penalty the penalty goes way beyond whatever tax would have been otherwise to be paid if there wasn't a quote subsidy and that is a penalty that's what big mama rag said triggers first amendment scrutiny is because first amendment speech is being penalize it's not necessary that it be prohibited only that is being penalize and furthermore they say the d circuit said that if there is sufficient vagueness that speech is being shelled then the first amendment first amendment speech is being chilled then a court is being jailed because of the possibility or have to pay taxes no because of the occurs because of the overbroad and vague line that we don't we don't know and hundreds of organizations have told you they won't know when they engage in lobbying when they're doing what is perfectly permissible and encouraged by the in the internal revenue service which is engage in discussion of public issues that's the chill that's the fear all we want all these organizations want is simply a definition that is understandable that we can apply that's all we want and that requires something more than these veg multimedia factor tests  submitted for decision by the court that completes our calendar for the morning we are in recess until nine am tomorrow morning in san francisco