Opinion ID: 382670
Heading Depth: 2
Heading Rank: 1

Heading: Who is Covered by the Full and Fair Exposition Test?

Text: 30 According to the terms of the Treasury regulation, only an organization that advocates a particular position or viewpoint must clear the full and fair exposition hurdle. Appellant maintains that the definition of an advocacy organization is to be found in the preceding subsection of the regulation, which defines the term charitable: 31 The fact that an organization, in carrying out its primary purpose, advocates social or civic changes or presents opinion on controversial issues with the intention of molding public opinion or creating public sentiment to an acceptance of its views does not preclude such organization from qualifying under section 501(c)(3) so long as it is not an action organization of any one of the types described in paragraph (c)(3) of this section. 32 Treas.Reg. § 1.501(c)(3)-1(d)(2) (1959). The district court held that this part of the regulation was designed to cover charitable institutions and that BMR, Inc., an educational rather than a charitable organization, must meet the full and fair exposition standard rather than the more lenient action organization standard of section 1.501(c)(3)-1(d)(2). 9 Obviously, if BMR, Inc. is an advocacy group and is not a charitable organization, it may not take cover under the action organization standard but must instead meet the full and fair exposition test. 33 The initial question, however, is whether or not BMR, Inc. is an advocacy group at all. What appellant turns to Treas.Reg. § 1.501(c)(3)-1(d)(2) for is the definition of advocacy, not for the appropriate standard to be applied to advocacy organizations seeking tax-exempt status. The district court did not deal with that question, and, indeed, it is difficult to ascertain from the language of the regulation defining educational exactly what organizations are intended to be covered by the full and fair exposition standard and whether or not the definitions of advocacy groups are the same for both educational and charitable organizations. 10 34 The uncertainty of the coverage of the full and fair exposition standard is evidenced by its application over the years by the IRS. The Treasury Department's Exempt Organizations Handbook has defined advocates a particular position as synonymous with controversial. 11 Such a gloss clearly cannot withstand First Amendment scrutiny. It gives IRS officials no objective standard by which to judge which applicant organizations are advocacy groups-the evaluation is made solely on the basis of one's subjective notion of what is controversial. And, in fact, only a very few organizations, whose views are not in the mainstream of political thought, have been deemed advocates and held to the full and fair exposition standard. 12 The one tax-exempt homosexual organization cited by the Government as evidence that the IRS does not discriminate on the basis of sexual preference was required to meet the full and fair exposition standard even though it admittedly did not advocate or seek to convince individuals that they should or should not be homosexuals. Rev.Rul. 78-305, 1978-2 C.B. 172, 173. 35 The Treasury regulation defining educational is, therefore, unconstitutionally vague in that it does not clearly indicate which organizations are advocacy groups and thereby subject to the full and fair exposition standard. And the latitude for subjectivity afforded by the regulation has seemingly resulted in selective application of the full and fair exposition standard-one of the very evils that the vagueness doctrine is designed to prevent. 36