Document: 461 U.S. 540 103 S.Ct. 1997 76 L.Ed.2d 129 Donald T. REGAN, Secretary of the Treasury, et al., Appellants,v.TAXATION WITH REPRESENTATION OF WASHINGTON. TAXATION WASHINGTON, Appellant, v. al. Nos. 81-2338, 82-134. Argued March 22, 1983. Decided May 23, 1983.* Syllabus Section 501(c)(3) Internal Revenue Code 1954 (Code) grants tax exemption to certain nonprofit organizations "no substantial part activities which is carrying on propaganda, or otherwise attempting influence legislation." 170(c)(2) permits taxpayers who contribute § deduct amount their contributions federal income returns. 501(c)(4) tax-exempt status but these are not deductible. Taxation With Representation Washington (TWR) a corporation organized promote its view "public interest" in area taxation; it was formed take over operation two other organizations, one had under and 501(c)(4). The Service denied TWR's application for 501(c)(3), because appeared that would consist legislation. TWR then brought suit Federal District Court against Commissioner Revenue, United States, claiming 501(c)(3)'s prohibition lobbying unconstitutional First Amendment by imposing an "unconstitutional burden" receipt tax-deductible contributions, also equal protection component Fifth Amendment's Due Process Clause veterans' qualify 501(c)(19). granted summary judgment defendants, Appeals reversed, holding does violate Amendment. Held: 1. Congress has infringed any rights regulated activity simply chosen subsidize out public funds. Cammarano 358 498, 79 524, 3 462. Pp. 545-546. 2. Nor sections at issue do employ suspect classification. A legislature's decision exercise fundamental right infringe thus subject strict scrutiny. It irrational decide such as should further benefit expense large obtaining subsidy lobbying. that, even though will charities generally, organizations. 546-551. --- U.S.App.D.C. ----, 676 F.2d 715, reversed. Sol. Gen. Rex E. Lee, Washington, D.C., appellants. John Cary Sims, appellee. Justice REHNQUIST delivered opinion Court. 1 Appellee what conceives be taxation. proposes advocate point before Congress, Executive Branch, Judiciary. This case began when applied exempt Code, 26 U.S.C. 501(c)(3). legislation, permitted 501(c)(3).1 2 this appellants, seeking declaratory qualifies claimed Clause.2 On appeal, en banc Columbia Circuit 715 (CADC 1982). Appellants appealed pursuant 28 1252, crossappealed. We noted probable jurisdiction 47, 74 55 (1982).3 operations non-profit corporations. One, Fund, goals publishing journal engaging litigation; other, Representation, attempted same influencing legislation; 501(c)(4).4 Neither predecessor organization required pay taxes. For purposes our analysis, there principal differences between Taxpayers returns, while engage advance purposes. 4 In case, attacking wants use taxdeductible support activities. To evaluate claims, necessary understand effect system enacted Congress. 5 Both exemptions tax-deductibility form administered through system. much cash grant have income. Deductible similar portion individual's contributions.5 provides kind non profit civic welfare additional those charitable short, chose extensively undertake welfare. 6 appears could still can obtain deductible non-lobbying returning dual structure used past, with would, course, ensure did organization; otherwise, funds might spent subsidize.6 7 contends Congress' violates relying Speiser Randall, 357 513, 78 1332, 1460 (1958), imposes condition" contributions. Speiser, California established rule requiring anyone sought advantage property sign declaration stating he forcible overthrow Government States. stated "[t]o deny claimants speech penalize them speech." Id., 518, S.Ct., 1338. 8 certainly correct states we held government may person exercises constitutional right. See Perry Sindermann, 408 593, 597, 92 2694, 2697, 33 570 (1972). But just incorrect claims fits Speiser-Perry model. receive activity, nor independent account intention lobby. merely refused monies. never must here wishes 9 aspect controlled 462 (1959), upheld Treasury Regulation business deductions 533. like Cammarano, activity. again reject "notion somehow fully realized unless they subsidized State." 515, 534 (Douglas, J., concurring).7 10 renders invalid. points 170(c)(3) Qualifying lobby want furtherance purposes.8 argues 11 Generally, statutory classifications valid if bear rational relation legitimate governmental purpose. Statutes subjected higher level scrutiny interfere right, freedom speech, classification, race. E.g., Harris McRae, 448 297, 322, 100 2671, 2690, 65 784 (1980). Legislatures especially broad latitude creating distinctions statutes. More than forty years ago addressed comments challenge legislation: 12 "The discretion classification possessed legislature field taxation long been recognized. . passage time only served underscore wisdom recognition needed formulating sound policies. Traditionally device fitting programs local needs usages order achieve equitable distribution burden. has, this, pointed taxation, more fields, legislatures possess greatest Since members necessarily enjoy familiarity conditions cannot have, presumption constitutionality overcome most explicit demonstration hostile oppressive discrimination particular persons classes. burden legislative arrangement negative every conceivable basis it." Madden Kentucky, 309 83, 87-88, 60 406, 407-408, 84 L.Ed. 590 (1940) (footnotes omitted). 13 San Antonio School Rodriguez, 411 1, 40-41, 93 1278, 1300-1301, 36 16 (1973); Lehnhausen Lake Shore Auto Parts Co., 410 356, 359-360, 1001, 1003-1004, 35 351 (1973). 14 already explained why conclude violated declining different were discriminate invidiously subsidies way " 'aim[ ] suppression dangerous ideas.' supra, U.S., 533, quoting 519, 501(c)(19) entitled regardless content use, including find no indication statute intended suppress ideas effect. distinction all based race national origin. 15 nonetheless "strict scrutiny" "affect[s] discriminatory basis." U.S.App.D.C., F.2d, 728 (emphasis supplied). Its suggests applies whenever subsidizes some speech. law. could, example, dedicated combatting teenage drug abuse, condition providing none money received from state legislatures. Under valid. enact alcohol impose using obtained existence second make first Congressional selection entities entitlement sort largesse "is obviously matter policy open judicial review circumstances able find. States Realty [163 427,] 444 [16 1120, 1127, 41 215] [ (1896) ]." Cincinnati Soap Co. 301 308, 317, 57 764, 768, 81 1122 (1937). also, id., 313, 766; Alabama Texas, 347 272, 481, 98 689 (1954). appropriations comparable deductions, "a grace [that] can, disallow chooses." Sullivan, 356 27, 512, 559 (1958). 17 These scarcely novel principles. several contexts Buckley Valeo, 424 96 612, 46 659 (1976), candidates office enter primary campaigns, provide run party primaries. rejected challenges provision without applying 93-108, 670-677. (1980), Maher Roe, 432 464, 97 2376, 53 484 (1977), considered decisions abortions, medical procedures subsidized. declined apply 18 reasoning simple: "although place obstacles path [person's] [speech], need remove own creation." Harris, 316, 2688. Although wants, like, Constitution "does confer realize advantages freedom." 318, As said Maher, "[c]onstitutional concerns State attempts force ." 476, 2383. Where "aimed ideas," "power encourage actions deemed interest far broader." 19 doubt within power area. better well true. Congress—not Court—has authority determine whether worth lobbying, disadvantages accompany concerned private interests members. Cong.Rec. 5861 (1934) (remarks Senator Reed); 5959 La Follette). 20 Veterans "been obliged drop affairs up burdens nation," Boone Lightner, 319 561, 575, 63 1223, 1231, 87 1587 (1943), "subjecting themselves mental physical hazards economic family detriments peculiar military service exist normal civil life." Johnson Robison, 415 361, 380, 94 1160, 1172, 39 389 (1974). Our country standing compensating veterans past numerous advantages.9 "always legitimate." Personnel Administrator Feeney, 442 256, 279, n. 25, 99 2282, 2296, 870 (1979). 21 lobby, reasons above, hold not. Accordingly, 22 Reversed. 23 BLACKMUN, whom BRENNAN MARSHALL join, concurring. 24 I join Court's opinion. Because 501's ante, 548, agree 501 provided rationally Nation's time-honored "compensating contributions." Ante, page. says, 548 550, designed discourage expression views present very question. 25 require protected 546, principle controls disposition claim. write separately clear my result depends entirely upon assumption—which share—about manner administers 501. If viewed isolation, restriction contained principle, reaffirmed today, 545, "that right." activities, see (1959); deprives eligible eligibility "substantial lobbying." Amendment, Eastern Railroad Presidents Conf. Noerr Motor Freight, Inc., 365 127, 137-138, 523, 529-530, 464 (1961), therefore denies significant choosing rights.* 27 defect inhere alone avoided notes, 544, nonlobbying create affiliate pursue Given relationship 501(c)(4), finds purpose 6; 545. Consistent purpose, "[t]he IRS apparently requires groups incorporated keep records adequate show 6. goes perhaps safely say lobby." organization's speak infringed, free known legislation losing benefits 29 Any channel communication, however, negate saving remembered retain petition Government. Should attempt limit control affiliates, problems insurmountable. hardly answers person's objection his another person, outside control, him. Similarly, prevent explicitly behalf affiliates perpetuate organizations' inability incurring penalty. Such restrictions extend beyond mere refusal 544-545, view, render scheme unconstitutional. 30 assume continue administer §§ keeping limited IRS' duty respect uphold Constitution. questions rather 518-519, 1338, * Together No. 82-134, Regan, appeal court. to: "Corporations, community chest, fund, foundation, operated exclusively religious, charitable, scientific, testing safety, literary, educational purposes, foster international amateur sports competition ., prevention cruelty children animals, net earnings inures shareholder individual, (except subsection (h)), participate in, intervene (including distributing statements), political campaign candidate office." requirements Equal Protection Fourteenth states. Schweiker Wilson, 450 221, 226 6, 101 1074, 1079, 67 186 (1981). contend lack cross-appeal 1252 refers appeals, Rule 12.4 establishes procedure taking cross-appeal. provides: "Any Supreme interlocutory final judgment, decree court Act action agencies party." language enough encompass appellee's does. Therefore, appellants' motion dismiss, together appeal. Unless indicated, citations statutes refer "Civic leagues promotion social welfare, devoted educational, recreational purposes." hand, subsidies, course mean assert respects identical. See, e.g., Walz Tax Commission, 397 664, 674-676, 90 1409, 1414-1415, 697 (1970); 690-691, 1422 (Brennan, concurring); 699, 1427 (opinion Harlan, J.). amici stringent unrelated congressional ensuring effectively impossible establish affiliate. No requirement code regulations called attention, discover one. unduly burdensome. note bring unable operate seeks less set bookkeeping requirements. Rather, Tr. Oral Arg. 37-39. Citizens Against Rent Control/Coalition Fair Housing City Berkeley, 454 290, 102 434, 70 492 (1981), relies, contrary. challenged ordinance limiting individuals' expenditures overruled enacting 162(e), businesses expenses "ordinary [business] expenses." Brief 13. elementary permit affect refusing rules governing deductibility analogous individual generally 50% adjusted gross 20% Compare 170(b)(1)(A) 170(b)(1)(B). carry excess next year. 170(d). There differences. treatment receive, more. (1979) (veterans' preference Civil employment); (1974) (educational benefits). (1958); 534, concurring) (denial business-expense deduction constitutional, taxpayer lobbies unconstitutionally rights); cf. 317 19, 2688, (1980) abortion withhold probably impermissible); 474-475, 8, 2382-2383, (1977) (same).

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